Argentine President Alberto Fernandez has indicated his support for digital assets, saying there is no reason to push back the emerging asset class.
In an interview with local media Caja Negra on August 12, Fernandez responded to a question of whether he would consider exploring a central bank digital currency (CBDC), or even recognizing Bitcoin as legal tender as El Salvador did earlier this year.
“I don’t want to go too far on a limb […] but there is no reason to say ‘no’, âFernando said, adding:â They say the benefit is that the inflationary effect is largely canceled out.
Inflation was a defining problem for the administration of former Argentine president, businessman Mauricio Macri. Government data indicates that 100 Argentine pesos since Macri left in 2019 would be worth the equivalent of 661 pesos today.
Despite Argentina’s strict currency controls, the current president has noted a growing perception of Bitcoin as a hedge against inflation in the wider global economy. However, Fernandez also noted with caution that it is still very early days for the cryptocurrency industry:
âThere is caution because of its ignorance and the fact that it is difficult to understand how this fortune materializes. Many people around the world have these concerns, and that is why the project, or the system, has not yet been extended [more than it has]. But it’s something to consider. “
Despite the president’s openness to exploring digital assets, Argentina’s central bank chief Miguel Pesce appears to be threatening to crack down on the industry.
Speaking At the Argentinian Institute of Financial Executives’ Digital Finance Forum on August 10, Pesce attacked cryptocurrency, calling digital assets a threat to economic stability and foreshadowing stricter regulations for the sector.
During the event, Pesce claimed that BTC was failing to generate value for investors outside of short-term hype cycles. The central bank chief also likened Bitcoin to a commodity, concluding that BTC “is not a financial asset” as defined by the country’s National Securities Commission.
Pesce expressed his intention to “regulate Bitcoin’s intersection with the payment system and the forex market,” warning that the cryptocurrency “could be very damaging” to national financial stability.
In regulating the sector, the central bank wishes to prioritize “preventing unsophisticated investors” from pledging crypto assets, Pesce saying:
“We are concerned that (cryptocurrencies) may be used to generate undue profits on unsuspecting people.”
Pesce also rejected the suggestion that Argentina would explore a central bank digital currency (CBDC).
Related: Report: Amid withdrawal, Argentinian Bitcoin miners are thriving
In May, reports indicated that retail cryptocurrency mining was booming in Argentina, with citizens looking to take advantage of cheap electricity and soaring crypto prices. That same month, the central bank reiterated its warnings to Argentines about the risks associated with crypto assets.
The previous month, Canadian mining company Bitfarms advanced its roadmap for expansion in Argentina, estimating that its next facility in Argentina will cut production costs by 45%.