Argentina has positioned itself as a prominent hub for fintech evolution in the Latin American (LATAM) region. With a growing number of firms and a thriving technological landscape, the country has outpaced many of its neighbors and even caught up with several European nations. However, amidst economic instability and a challenging legislative environment, understanding the rules surrounding fintech, cryptocurrencies, and payment systems becomes crucial. In this article, we will explore the fintech landscape and crypto regulation in Argentina, diving into the controlling structure, licensing process, and opportunities for innovation.
Argentina differs from the United States in terms of its approach to Money Transmitter Licenses (MTLs). While the US has a state-by-state licensing system, Argentina has adopted a centralized approach, with the Central Bank of Argentina (BCRA) serving as the sole agency, giving MTLs. As the federal system controlling the national banking and remittance systems, the BCRA plays a pivotal role in shaping the fintech field.
To comprehend the intricacies of fintech rules, it is essential to grasp the payment system landscape in Argentina. The BCRA established the National Payment System (SNP), which encompasses payment instruments, procedures, and methods facilitating the circulation of money within the country. Funds transfers, a key component of the SNP, allow for both commercial and non-commercial transactions, supporting payment methods and personal sendings.
Payment Service Providers (PSPs) operating within the remittance scheme in Argentina have specific roles and corresponding licenses. PSPs can serve as payment account providers, initiators, ATM funds transfer managers, or electronic fund transfer intermediaries. To operate legally, PSPs must register with the BCRA under the Registry of PSPs. Additionally, the BCRA has introduced two specialized licenses for certain roles: the Proveedor de servicios de pagos que ofrece cuentas de pago (PSPCP) license for payment account providers and the PSP que cumplen la función de iniciación (PSI) license for initiators.The MSB license (Money Transmitter License) allows firms to legally supply options related to funds transfers and other payment actions. The MSB license in Argentina is issued by the BCRA and is necessary for fintech firms that engage in money transmission or payment services.
To register as a Payment Service Provider (PSP) in Argentina and obtain the necessary licenses from the Central Bank of Argentina (BCRA), firms must fulfill certain requirements. The enrollment process involves complying with specific criteria and providing essential data. Here are the registration demands for fintech firms in Argentina:
It is important to note that the BCRA may request additional documentation or information during the registration process, depending on the specific circumstances of each firm. The registration demands aim to ensure transparency, stability, and conformity with the administrative framework governing the fintech sector in Argentina.
Once the registration is complete and all demands are met, firms can proceed with the licensing process and apply for the appropriate licenses based on their role within the payment scheme, such as payment account provider or initiator.
Certain restrictions apply to PSP licenses in Argentina. Currently, only companies incorporated in Argentina or foreign companies with local subsidiaries are eligible to apply. Notably, no foreign firms currently hold PSP licenses in Argentina. Furthermore, PSPs are prohibited from lending user funds, and all funds must be fully deposited in a bank’s sight account. PSPs can only offer accounts denominated in Argentine pesos, and they, along with banks and monetary entities, cannot charge fees for remittances between end users or accounts held by the same individual. As of May 2023, PSPs are also prohibited from offering products or services related to virtual assets or cryptocurrencies. However, some local players have navigated this restriction by separating their crypto and fiat operations into distinct entities.
Despite the administrative challenges, the monetary field in Argentina offers immense potential for innovation. By complying with the BCRA’s regulations and licensing demands, firms can establish themselves in a market ripe for disruption. Fintech solutions, particularly in areas such as mobile transfers, remittances, and digital wallets, can address the country’s economic complexities and contribute to monetary inclusion.
As Argentina continues to solidify its position as a leading fintech hub in LATAM, understanding the administrative framework is crucial for fintech firms aiming to operate within the country. By navigating the licensing process, adhering to rules, and capitalizing on opportunities for innovation, fintech ventures can contribute to the growth and development of Argentina’s vibrant fintech ecosystem.
Yes, cryptocurrency is legal in Argentina. The country has adopted a relatively open approach towards cryptocurrencies, allowing their use and trade within the regulative framework.
Argentina has witnessed a growing interest in cryptocurrencies and blockchain technology. While the government has not explicitly regulated cryptocurrencies as legal tender, they are considered a digital asset. The use of cryptocurrencies, such as Bitcoin, Ethereum, and others, is widely accepted in various sectors, including e-commerce, remittances, and investments.
The Argentine government has taken steps to regulate and monitor cryptocurrency activities to prevent money laundering, terrorist financing, and other illicit activities. In 2019, the Monetary Information Unit (UIF) issued guidelines that require cryptocurrency exchanges and firms to register and report transactions exceeding a certain threshold.
Additionally, Argentina has seen an increase in the number of cryptocurrency-related commerces and startups. Local players have found ways to operate within the regulative boundaries by separating their crypto and fiat operations into distinct entities.
Overall, while cryptocurrency is legal and widely accepted in Argentina, the regulatory field continues to evolve as authorities work to establish comprehensive guidelines and frameworks to ensure consumer protection and mitigate risks.
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