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Separating fact from fiction in Argentine economic policy
- Javier Milei’s administration does not plan to adopt bitcoin as Argentina’s currency, instead focusing on dollarization.
- Discussions with El Salvador focused on regulatory frameworks for cryptocurrencies, not the adoption of bitcoin as legal tender in Argentina.
After the election of Javier Milei, various reports have emerged, inaccurately describing his administration’s stance towards Bitcoin in Argentina. Contrary to these claims, Milei is not leading Argentina towards adopting bitcoin as a standard currency.
Misinterpretations of Milei’s Bitcoin Policy
Recent headlines have sparked confusion suggesting that Milei plans to implement a bitcoin standard similar to El Salvador’s approach. However, these interpretations are not in line with his actual political intentions.
Milei has in fact shown a positive attitude towards bitcoin and has been critical of the central bank’s operations, but his main economic strategy focuses on thedollarization of Argentina, not the establishment of bitcoin as legal tender.
During a meeting last week with local regulators and the director of El Salvador’s Crypto Active division, discussions focused on self-custody rights and creating a regulatory framework for cryptocurrencies that complies with international standards, particularly those established by the Financial Action Task Force (FATF). The conversation was not about plans to integrate bitcoin as an official currency.
The regulatory environment of cryptocurrencies in Argentina
The Argentine government is currently reviewing its cryptocurrency regulations to ensure compliance with FATF guidelines. This includes stringent regulations for virtual asset service providers (VASPs) to improve transparency and security within the financial system, without necessarily moving towards a bitcoin standard.
“Bitcoin is viewed with skepticism by Argentine authorities, who appear more committed to the FATF and IMF than to self-custody and on-chain transactions.” – Ricardo Mihura, president of the NGO Bitcoin Argentina
Ricardo Mihura, president of the NGO Bitcoin Argentina, noted Argentine authorities’ skepticism regarding bitcoin, emphasizing their focus on adhering to FATF and International Monetary Fund (IMF) standards rather than adopting decentralized crypto transactions.
“Last month, amendments to a tax bill in the Senate went in this direction: only cryptocurrencies held in local VASPs appear to benefit from the tax amnesty regime proposed by the Executive.”
Furthermore, recent amendments to a tax bill in the Argentine Senate reflect a cautious approach towards cryptocurrencies, favoring cryptocurrencies held in trust by local VASPs as part of a tax amnesty scheme proposed by the executive. This indicates a regulatory inclination towards control and oversight, rather than a full adoption of bitcoin or any other cryptocurrency as legal tender.
The economic context and current focus of Milei
Amid challenges such as inflation, currency devaluation, and strict forex control, Argentina’s central bank continues to ban banks and payment service providers from offering cryptocurrency-related services.