The Argentina's central bank (BCRA) has placed a stop to financial institutions allowing crypto trading, just days after two of the country's major banks said they were considering it.
The BCRA announced the action on Thursday in order to reduce the dangers that crypto poses to consumers and "to the financial system as a whole," emphasizing crypto's excessive volatility, usage in money laundering, and lack of regulatory protections.
The reports come after two of the country's largest banks, Banco Galicia and Brubank, said on Monday that its clients will be able to buy Bitcoin (BTC), Ether (ETH), USD Coin (USDC), and Ripple (XRP) (XRP).
A study performed by Banco Galicia determined that 60% of participants requested easier access to digital currencies, prompting the move to introduce crypto trading.
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The central bank has long been skeptical about cryptocurrency, releasing a public warning about the risks in May of last year, citing worries about volatility and money laundering despite the fact that the bank said there were no indicators of "substantial levels of adoption and use."
As per research from Statista, in 2021, 21% of participants in Argentina held or used cryptocurrency, making it the world's sixth-highest rate of acceptance and the highest in the Americas.
The International Monetary Fund (IMF) cautioned that adopting Bitcoin as legal cash and legalizing the usage of cryptocurrencies in the Central African Republic (CAR) might generate financial instability in the country.
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The criticism arose after the group expressed hardline views on El Salvador's acceptance of Bitcoin and President Nayib Bukele's ambitious proposal to establish Bitcoin-backed bonds on many occasions.
The international authority expressed worry about the macroeconomic and legal issues associated with Bitcoin adoption. In an email answering to Bloomberg, the IMF noted:
“The acceptance of Bitcoin as legal money in C.A.R. creates serious legal, transparency, and economic policy issues. The IMF is aiding the area and the Central African Republic's government in dealing with the new law's challenges."
The IMF was no stranger to criticism in general. El Salvador's decision to accept Bitcoin as its currency earlier this year was described by the fund as a "major risk" to the market that might result in "contingent liabilities." The IMF also noted "price volatility" and a lack of applications as major concerns with Bitcoin as a legal money.
