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Argentina Explores Bitcoin Collaboration with El Salvador to Boost Crypto Adoption

2 mins
Updated by Daria Krasnova
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In Brief

  • Argentina's CNV met with El Salvador's CNAD to explore Bitcoin regulation cooperation.
  • Argentina's crypto adoption rises amid economic challenges, with stablecoins mitigating currency restrictions.
  • CNV officials praised El Salvador's Bitcoin progress, considering collaboration agreements.
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The National Securities Commission of Argentina (CNV) confirmed the country is considering cooperating with El Salvador on Bitcoin adoption. This follows an important meeting between Argentinian and Salvadoran regulators last week.

Officials from Argentina’s CNV met with Juan Carlos Reyes, head of El Salvador’s National Digital Assets Commission (CNAD), to discuss El Salvador’s Bitcoin regulation strategies.

Learning from El Salvador’s Experience

High-ranking CNV officials, including President Roberto Silva and Vice President Patricia Boedo, visited El Salvador. The President highlighted Argentina’s proactive stance in learning and praised El Salvador’s progress in forming cooperation agreements.

“El Salvador has emerged as a leading country in the use of Bitcoin and the broader world of crypto assets. We want to strengthen ties with El Salvador. We will explore signing collaboration agreements with their government,” Silva stated.

The CNV’s efforts could relieve Argentina’s Bitcoin community. Despite President Javier Milei’s pro-Bitcoin stance, Buenos Aires faces pressure from the IMF to regulate crypto exchanges.

The country faces severe economic challenges, including high inflation and currency depreciation, have spurred Bitcoin trading. Crypto adoption has increased since 2017, with many using it for everyday transactions. Argentina has also seen a rise in crypto startups, offering innovative solutions to economic challenges.

Read more: Crypto Adoption in Argentina: Everything To Know

Most-purchased cryptocurrencies by fiat currency on exchanges.
Most-purchased cryptocurrencies by fiat currency on exchanges. Source: Chainalysis

Strict currency controls have led to a surge in stablecoin use. These digital assets provide a hedge against currency restrictions. A report by Bitso indicated that 60% of crypto trading volume in Argentina comes from stablecoins like USDT or USDC.

El Salvador, under President Nayib Bukele, became the first country in the world to adopt Bitcoin as legal tender. Bukele’s initiative has significantly boosted the country’s economy. BTC adoption has attracted global tourists to El Salvador’s popular destinations. Additionally, the country buys the asset daily and mines it using energy from volcano-powered operations.

The potential cooperation between Argentina and El Salvador could signal a shift in Argentina’s approach to digital assets. With significant crypto adoption among its population, this move might pave the way for a more regulated and secure environment. However, all of these changes can take a significant amount of time. According to President of the NGO Bitcoin Argentina Ricardo Mihura, the country is very far from heterodox and courageous policy El Salvador embraced.

“I am afraid there is some misunderstanding or an excess of optimism with respect to the adoption of Bitcoin in Argentina.
Notice that our banks and neo banks are still prohibited from rendering crypto services to their clients. The goverment is still struggling with inflation, devaluation, and forex control. Even dollarization, which was one of the main promises of Milei during campaign, seams to be farther each day. In this context, I see the relation with El Salvador more as an interesting model of regulating VASPs. Much more than a full admision of Bitcoin as a currency, even with or without legal tender,” Mihura told BeInCrypto.

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Shota Oba
After interning at a domestic blockchain media company while enrolled at a university in international relations, he worked as an intern trainee at two foreign crypto asset exchanges. Currently, as a journalist, he focuses on the Japanese crypto asset market, both technical and fundamental analysis. He has been trading crypto assets since 2021 and is interested in economic and social affairs.