In the last two weeks there have been two regulatory developments with a very high symbolic impact about the world of cryptocurrencies in our country, whose practical effect will depend on how they end up being implemented.
In chronological order, on April 11, the National Securities Commission (CNV) authorized for the first time a regulation of futures contracts on the Bitcoin Index to be traded on Matba/Rofex, with negotiation and settlement in Argentine pesos.
Much more relevant still, on April 19 the Chamber of Deputies approved a bill (which must pass to the Senate) referring to the prevention of money laundering, containing a chapter that involves the crypto ecosystem, establishing that The CNV will be the body in charge of registering, regulating, supervising, inspecting, auditing and sanctioning the Virtual Asset Service Providers (This concept involves almost all the actors that populate this vast digital universe).
As a first reflection, and contrary to what the so-called crypto maximalists -enemies of any type of state intervention- believe, The authorization of the futures contract and the probable approval of the law come to validate the existing functioning of the crypto ecosystem in our country by giving entity to virtual asset service providers that today operate without a specific legal framework, exhaustively defining a financial regulator, the CNV.
As a second derivative and possibly more important than the first, the key to how this rule will impact will lie in the way in which said intervention is regulated, which according to its tenor can lead both to a greater development of the crypto ecosystem domestically and to its going “underground”. Beyond the temperament that the State finally takes, in no case will crypto products stop being developed and operated by Argentines; Opening up at least two possible scenarios: either this ecosystem will continue to exist and expand now under a defined regulatory framework with registered and supervised actors in our country, or if the legal framework is excessively restrictive, it will continue to be used by Argentines but outside the radar of local supervisors with platforms located in other jurisdictions. The fine tuning with which this law is regulated is the key to its success when considering both the global framework and apparently minor issues, such is the case of the treatment of the rule on operations carried out by natural persons in a decentralized manner. Also, when regulating the law, it must be considered that the ecosystem of virtual assets today far exceeds the sale of bitcoins and ether, there being a multitude of solutions, contracts, products, platforms and actors that use various digital technologies, among which the of distributed registry, especially that of chain of blocks (blockchain) that could also be reached by this standard.
As a current example of the impact that regulatory pressure can have, the advance of the United States Securities and Exchange Commission (SEC) on the crypto universe, the product of numerous frauds of various calibers, has caused several of the main players in that country to be thinking or threatening to move to other “friendlier” jurisdictions. Such is the case of the main American crypto market (exchange) Coinbase.
In our case, to determine the scope of the regulatory framework, the objectives that it will pursue must be clearly defined. The protection of retail investors who experience ignorance, fraud and asymmetries in information and the protection of financial stability must be balanced with the promotion of innovation and the development of the digital industry and that of knowledgein which Argentina has world-class raw material that we should not miss.
A third element to evaluate the possible impact of the law is to analyze the DNA of the entity chosen to regulate this diverse ecosystem. Throughout its history, the National Securities Commission has been an organization made up of trained professional resources, endowed with a special mystique.but with a limited budget that generates both low salaries for its staff and the impossibility of having the necessary tools to face a financial system with extensive economic resources, dynamic, and increasingly complex and interrelated.
The emergence in the last decade of technological finance (Fintech) and the growing expansion of large companies (Bigtechs) -being Mercado Libre/Pago the best local example- has radically modified the morphology of traditional banking and capital market systems. incorporating more agile and inclusive solutions and technologies that are increasingly modern but difficult for regulators to follow. Much of the technological advances in these segments have focused on the heart of financial systems, their payment system, making it increasingly efficient in terms of immediacy and costs. However, this key area of the financial system and the crypto world is regulated in our country by the Central Bank of the Argentine Republic, an entity that is not mentioned in the Law regarding the crypto ecosystem. The main financial regulators in the world invest a large part of their budget in building or acquiring technological solutions that allow them to navigate the digital age that we are living in.
Likewise, if one observes the experience of some neighboring countries, one will see that in the face of changes in their financial systems, regulators tend to integrate in an increasing way. To mention just two close examples, Uruguay has concentrated all the supervisors of the financial system within its Central Bank for decades, and Chile has just modified its regulatory structure in the same sense by integrating all financial regulation in the same entity, but with a format different from the Uruguayan one.
In this context, each country needs to rethink its regulatory model idiosyncratically. In our financial reality, it does not make sense for the CNV to be separated from the BCRA, the integration of both organizations would make it possible to streamline and consolidate the operation of the financial system, make it more inclusive, protecting savers more effectively, avoiding duplication and lack of coordination, reducing costs for both the public and private sectors. Under this scheme, the crypto world, for example, could be approached with a more comprehensive look and with better tools.
This issue deserves a serious debate that has not yet happened and that, when properly stated, could be agreed upon by the vast majority of public and private actors in our country. The Argentine political class has shown a great inability to seek and find minimum consensus on relatively simple issues, wearing itself out in aggressions and mutual grievances.
Perhaps instead of proposing to blow up (an expression of gratuitous violence) institutions like the Central Bank -which exist in almost every country on the planet-, As a society, we should consider the possibility of dialogue without prejudices and without exclusions regarding how to modernize financial regulators to help the harmonious development of our country and insert ourselves into the digital society. where artificial intelligence, deep learning, and the management of massive information have already arrived to inevitably change our lives.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
