Argentinean senators cut a $45 billion bailout deal with the International Monetary Fund (IMF) on Thursday to help the country avoid defaulting on its debts, with an unusual clause attached.
The deal was approved in a 56 to 13 vote that includes a brutal provision that forces the government of President Alberto Fernández to take an anti-Bitcoin and anti-cryptocurrency stance.
The letter of intent had the clause included and was signed by Economy Minister Martín Guzmán and Central Bank President Miguel Pesce on March 3rd, 2022. The clause mandates Argentina’s efforts “to discourage the use of cryptocurrencies with a view to preventing money laundering, informality, and disintermediation” in order to “further safeguard financial stability”.
Argentina’s anti-money laundering Financial Information Unit is working to add cryptocurrency service providers to its list of entities subject to reporting customer transactions, according to the Buenos Aires Times this week.
The deal is yet to be approved by the IMF’s executive board, however, if it goes through, Argentina will have completed its 22nd agreement with the fund and will immediately receive $9.8 billion.
Argentina is in a debt spiraling situation where a $2.8 billion payment to the IMF was to be made by March 22nd with a total of $39 billion in debt payments through 2023.
Argentina’s inflation rate hit 52.3% in February, and some banks including JPMorgan Chase are predicting consumer prices to increase more than 60% in 2022 as commodity inflation echoes globally.
The rising inflation rate in Argentina led the country to seek financing from the IMF, but it also led to a surge in users in crypto firms as consumers are looking for ways to protect their paychecks. The top crypto exchanges in the country, Lemon Cash and Ripio, claim to have millions of active users and have also expanded their offerings of crypto credit cards that give cash back in Bitcoin.
The new potential anti-cryptocurrency stance for Argentina’s crypto firms and citizens will have a huge affect on the country as things develop.