Argentine senate to vote on IMF agreement discouraging use of cryptocurrencies

The letter of intent was signed by both parties on March 3 and already approved by the Chamber of Deputies.

The Argentine Senate will be voting on a letter of intent the country struck earlier this month with the International Monetary Fund (IMF) that includes a provision discouraging the use of cryptocurrencies.

The agreement would restructure a $45 billion loan the country received in 2018.

The cryptocurrency provision is part of a Technical Memorandum of Understanding (TMU) signed by Argentina and the IMF on March 3.

The agreement was already approved by the Chamber of Deputies, lower house of the Argentine National Congress, on March 11 and was scheduled to be discussed late Thursday by the Senate for final approval.

The provision, entitled “Strengthening financial resilience,” says: “To further safeguard financial stability, we are taking important steps to discourage the use of cryptocurrencies with a view to preventing money laundering, informality and disintermediation.”

The letter of intent also describes that “while commercial banks remain liquid and well-capitalized, strong bank oversight will continue, especially following the unwinding of pandemic-related regulatory forbearance.”

Argentina also plans to continue its payment digitalization process “to improve the efficiency and costs of payments systems and cash management,” according to the letter-of-intent.

The Latin American country, which recorded year-on-year inflation of 52.3% in February, has become one of South America’s the leading crypto hubs in the region. Stablecoins purchases increased six-fold in 2020, according to information provided by local exchanges.