Argentina: Central Bank Had Officially Prohibited Citizens from Purchasing Bitcoin amid USD Crackdown

According to the latest news, Argentina’s central financial institution had officially banned citizens from buying Bitcoin (BTC) and different crypto using bank cards on November 1. However, the ban produced an opposite effect when Bitcoin’s trading volumes in Argentina have just reached a new record high in the Argentine peso (ARS).

Until the present time Argentina’s economy still has high volatility

Argentina has been going through a bout of political and economic turmoil, which has culminated in rapidly-increasing inflation and a tumultuous stock market. In general, there is no guarantee that holding Argentine pesos or local assets is sustainable. In simply the previous 5 years, the price of the peso towards America greenback has fallen via over 85%. Hence, the residents of the country have looked to alternative assets, like Bitcoin and U.S. dollars.

However, in order to preserve its foreign exchange reserves, Argentina’s central bank wrote in a recent message that purchasing cryptocurrencies, especially BitCoin with certain payments are banned.

“Acquisition of Bitcoin and cryptocurrencies: It is prohibited to purchase BTC with this payment method. The only remaining alternative for this investment is to do so with funds transferred from a bank account,”  the bank stated.

It wasn’t a Bitcoin-specific clampdown because  Before the nation’s central bank announced a further tightening of a limit on the number of dollars an individual can purchase from it each month, but that was a worrisome sign for the local crypto industry nonetheless.

However, despite the ban, Bitcoin continues to thrive, reaching a record-breaking trading volume in the Argentine peso (ARS).

In fact, despite political uncertainty and economic instability, Argentina remains a major crypto hub in Latin America. Moreover, the residents of the country have previously had little confidence in their currency. So, Bitcoin ATM providers see it as one of the main destinations for their expansion.

The hasty decision of Argentina’s central bank

It must be said that the country’s central bank erroneously predicted the consequences of the ban when it produces an opposite effect when Bitcoin’s trading volumes in Argentina have just reached a new record high in the Argentine peso (ARS).

The bank’s efforts became a serious mistake that made the country’s economy more severe crisis.

Meanwhile time has proven the superiority of  BitCoin. The cryptocurrency transactions cannot be censored, can be sent around the world to anyone in minutes, and are cheap when compared to the bank wire system that exists in the fiat system. In addition, BTC isn’t able to be hyperinflated, as there exists a strict 21 million coin supply cap.

Furthermore, Argentinian monetary authority announced that it would only be allowing individuals Argentinians to purchase $200 per month on the legal market. Previously, individuals were allowed to purchase up to $10,000 a month. This made the country’s citizens even more indignant, so they want to choose other currencies instead of traditionally devalued pesos.

If Bitcoin is a great proper solution?

In fact, the adoption of Bitcoin and cryptocurrencies makes sense fundamentally — they are presumably more stable, an easier way to transact, and more global than the Argentine peso. However, there is no guarantee that Argentinians across the country are embracing cryptocurrencies.

Alex Kruger, An Argentinian crypto-macro researcher, who stated that Argentina’s economy was flailing earlier this year that his peers back at home weren’t buying Bitcoin. He wrote in Twitter threads that Bitcoin awareness in Argentina is “extremely low”. And that’s why the idea that Argentines are rushing to scoop up Bitcoin with their life savings doesn’t make much sense.

In general, nothing will guarantee that in the future, the BitCoin or USD will change the economic situation of this country.

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VK Anderson

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