Argentinean Central Bank President Miguel Angel Pese said he was wary of cryptocurrencies due to their high volatility.
In his recent speech, Pese said that he was confused by the expression “currency” used in the word “cryptocurrency”. He called it inappropriate, as blockchain-based units of account are the exact opposite of what real currency should be. Pese believes that cryptocurrencies are “something hidden and incomprehensible”, they are not used as legal tender, are highly volatile, are prone to operational disruptions and cyber attacks, and do not imply any guarantees for users.
“Because of misinformation, people are investing in cryptocurrencies, but they have no control over their investments. We have to explain this to the population in order to avoid such situations, ”said Pese.
He said that initially, digital assets were created as a payment mechanism, and not as a tool for investment, but given that the value of cryptoassets depends on their scarcity, they began to be considered financial instruments. This contributes to the excessively high volatility of cryptoassets – the very characteristic that a currency should not have. According to Pese, stability is the fundamental basis of any currency.
The value of the Argentine peso fell from $ 0.017 to $ 0.010. In 2019, the Central Bank of Argentina introduced a restriction for citizens of the country on the purchase of US dollars – they are allowed to buy no more than $ 200 per month. In this scenario, purchases of stablecoins on cryptocurrency exchanges increased sixfold during 2020.
In addition, in 2019, the Argentine central bank forced service providers to convert US dollar revenues into Argentine pesos through a dedicated exchange channel. Therefore, in order to avoid switching to Argentine pesos, many service providers choose to receive payments in cryptocurrencies. Pesé stated that even such payments should be considered dollarized, and the received cryptocurrencies should be converted into Argentine pesos.
“You can receive payments in anything – goods, coins or cryptocurrencies, but the rules of the central bank must be respected. Therefore, we will closely monitor that crypto assets are not used to bypass them, “- said the President of the Central Bank of Argentina.
Despite the categorical refusal of the Bank of Argentina to soften its attitude towards cryptocurrencies, Argentine President Alberto Fernandez expressed his readiness to recognize bitcoin as a legal tender.
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