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In Buenos Aires, the capital of Argentina, Bitcoin Argentina’s president, Ricardo Mihura, unveiled a draft legislation during LABITCONF 2023 on November 10. This proposal by Bitcoin Argentina, an NGO committed to crypto advocacy, seeks to regulate the cryptocurrency sector while maintaining decentralization and building public trust. Historically, Bitcoin Argentina had resisted regulatory measures for the crypto industry but has now pivoted, citing the need to curb dishonest practices and protect blockchain integrity.
We have always rejected attempts to regulate the crypto economy, but this time we set ourselves the goal of giving a positive response, with only two purposes: preserving decentralization and protecting savings and public trust.
Mihura spoke about the urgency of addressing deceptive practices and projects falsely by those who use these tactics and label them with the words “blockchain” or “cryptocurrency”.
The draft bill is structured to categorize crypto platforms and service providers into three groups based on their stance towards property rights: decentralized, locally centralized (or those willing to communicate with authorities), and globally centralized. The legislation, if passed, would allow centralized platforms to operate with freedom but would guarantee customers extensive legal protection, including compensation claims against company failures. Decentralized platforms, on the other hand, would be exempt from intervention by Argentine courts.
Crypto Cannot be Banned, Only Regulated
Mihura, in his address, pointed out the futility of completely banning cryptocurrencies, highlighting blockchain’s global reach. He remarked that “Not even the United States can effectively prohibit the operation of the unlicensed cryptoeconomy.” and continued to say that Argentina has no means of restricting its residents from operating in the global free market facilitated by the Internet. As a response to these limitations, Bitcoin Argentina suggests a regulatory framework that provides optimal legal support for Argentine citizens.
@BitcoinAR presentó el anteproyecto de #LeyBitcoin.
La asociación civil, encabezada por su Presidente @RikyMihura, presentó en el ámbito de #LABITCONF 2023 el anteproyecto de ley que propone regular el mercado de la criptoeconomía.
👉https://t.co/gFJUMJ1iTY pic.twitter.com/p84RkbUae0— Carlos Garsés (@carlosgarses) November 11, 2023
This draft legislation also aims to hold accountable those involved in fraudulent crypto activities, extending from direct perpetrators to beneficiaries of such schemes. Mihura stressed the importance of protecting victims across the entire marketing chain of crypto frauds. This initiative by Blockchain Argentina aligns with the crucial period of Argentina’s presidential run-off, featuring candidates Sergio Massa, the country’s economy minister, and Javier Milei, an economist and politician who advocates for replacing Argentina’s central bank with the U.S. dollar.
Milei, a self-identified libertarian economist, has made numerous talk show appearances during his presidential campaign and has passionately argued for the benefits of Bitcoin and other cryptocurrencies. He sees Bitcoin, along with other digital currencies like Ethereum, as a “return of money to its original creator: the private sector.” His pro-Bitcoin stance has earned him the admiration of a significant segment of the population, including the so-called “protest voters,” of whom many are advocates of cryptocurrency.
Argentina faces a significant inflation crisis, recording a 121.7% annual inflation rate, one of the highest globally. Concurrently, the nation is witnessing rapid growth in the cryptocurrency market. Research from GWI shows Argentina’s digital asset ownership rate at 23.5%, second only to Turkey’s 27.1%, reflecting the country’s increasing inclination towards cryptocurrencies amidst economic challenges.
Can Bitcoin Solve Argentina’s Crisis?
Due to this economic inflationary crisis, Argentina presents a compelling case for the adoption of Bitcoin and other cryptos as an alternative financial system. Cryptocurrencies, by their very nature, offer a decentralized form of currency, immune to the control of any single government or central bank. This inherent characteristic could serve as a bulwark against the rampant inflation caused by excessive money printing and fiscal mismanagement, typical issues in traditional fiat currency systems.
The fixed supply of Bitcoin, capped at 21 million, in contrast to the potentially limitless printing of fiat currencies, provides a safeguard against devaluation, making it an attractive store of value for Argentinians looking to preserve their purchasing power. Furthermore, crypto can facilitate faster and more cost-effective cross-border transactions, a significant advantage for a country like Argentina, where the economy is heavily reliant on international trade and remittances.
The integration of cryptocurrencies into Argentina’s financial system could spur a wave of innovation and investment in the country. The blockchain technology behind cryptocurrencies (including Bitcoin) is not just a monetary tool; it’s a platform for building decentralized applications that can transform various sectors, including finance, supply chain, and governance. This potential for innovation could attract both domestic and international investments, providing a much-needed boost to the Argentinian economy. Additionally, a wider crypto adoption could lead to greater financial inclusivity, offering unbanked or underbanked populations access to digital financial services.
This inclusivity could help stimulate economic activity at the grassroots level, providing a foundation for sustainable economic growth and, ultimately, a potential pathway out of the inflationary spiral. By embracing crypto, Argentina could position itself at the forefront of a financial revolution, potentially setting a precedent for other countries grappling with similar economic challenges.
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