The President of Argentina’s Central Bank has said that cryptocurrencies must be monitored closely and that they must not be used to flout foreign exchange regulation.
Miguel Pesce said in a recent meeting organized by the Argentine Chamber of Fintech that the Argentine central bank would be “closely monitoring” cryptocurrencies. Pesce, the president of the central bank, said that the volatility of cryptocurrencies was one of the biggest issues. In addition, he wants to ensure that crypto cannot be used to flout foreign exchange controls.
The virtual meeting saw Pesce offer his thoughts on fintech in general and the growing prominence of cryptocurrencies. He implied that banks have to adapt to the changing dynamics brought about by fintech companies.
Pesce also stated the bank was “concerned about the development of cryptocurrencies,” noting its high volatility.
Volatility, he says, is precisely what currencies should not have. The bank’s head was not completely against the asset class, stressing that dollarized payments must go through a single exchange market. He said,
“This is so, it is the rule of the Central Bank. One can receive the payment in the instrument or in the goods that he wants: in the same way that you can receive a payment in kind, you can receive a payment in cryptocurrencies.”
The citizens of Argentina are no strangers to cryptocurrencies. In 2019, when the Argentina stock market crashed heavily, bitcoin was traded at a premium price. Later that year, the country recorded the highest LocalBitcoins volume ever at the time.
Regulators everywhere brooding over cryptocurrencies
The overall impression that Pesce gave was that regulation would have to find a middle ground in regulating the cryptocurrency market. There has not been much to say in this regard in Argentina. Though that may change with the speed at which governments are handling regulation.
Many governments and regulatory bodies find themselves in a difficult position. The new asset class is quickly growing and being adopted by the mainstream. Billions of dollars are being poured into the market from well-established professional investors.
But regulation hasn’t caught up with that growth, and governments are now hurrying efforts. The novelty of the asset class has made it difficult to establish a clear framework. Some governments, like South Korea, are making energetic attempts, while others like the U.S. are taking their time.
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