Argentina’s embrace of Bitcoin seems to be cooling off. A new law requiring registration for crypto businesses throws cold water on hopes for a Bitcoin-friendly El Salvador 2.0.
Argentina Mandates Registration for Crypto Service Providers
Argentina took a step back from enthusiastic Bitcoin adoption last week by implementing a new registry for Virtual Asset Service Providers (VASPs). This move comes as a surprise to some who expected a more El Salvador-like approach from the newly elected president, Javier Milei.
The registration requirement applies to individuals and platforms involved in buying, selling, sending, or trading cryptocurrencies. While the regulation appears to be a leftover from the previous administration, its implementation under Milei has disappointed Bitcoin maximalists.
Max Kaiser Criticizes Milei’s Move
Max Kaiser, a prominent Bitcoin advocate and advisor to El Salvador’s president, took to social media to express his disapproval. He believes Milei hasn’t grasped the true potential of Bitcoin and will “suffer the consequences” for this regulation.
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Javier Milei makes his first major mistake.
He never took the time to understand #Bitcoin, now he’ll suffer the consequences. https://t.co/P2arqfxrE2
— Max Keiser (@maxkeiser) April 1, 2024
Immediate Impact on Crypto Payments
The new law appears to be having a swift impact. Users of the Strike payment app, popular for facilitating Bitcoin payments, reported being notified that the “Send Globally” function between Argentina and the US will no longer be available. CoinDesk has contacted Strike for clarification on this change.
Milei: From Bitcoin Advocate to Pragmatist?
President Milei, a libertarian known for his support for Bitcoin as a hedge against inflation and central bank control, came to power in December 2023 facing a staggering inflation rate. He has achieved some success in reducing government spending, with Argentina experiencing its first monthly budget surplus since 2011. Additionally, the monthly inflation rate has shown a downward trend, dropping to 13.2% in February from a high of 25.5% just two months prior.
Mixed Reactions to the New Regulation
Not everyone views the VASP law negatively. An Argentinian resident commenting on a popular social media platform noted that such regulation might be necessary to attract more foreign investment.
The Future of Crypto in Argentina
The new VASP registry marks a shift in Argentina’s approach to Bitcoin. While it remains to be seen how this impacts wider cryptocurrency adoption in the country, it’s clear that the path towards becoming a Bitcoin haven like El Salvador has become significantly more complex.
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