Argentine Authorities Approve IMF’s $45 Billion Crypto-Stifling Debt Deal
Argentina Senate on March 17, 2022, voted in favor of a deal to restructure $45bn in debt with the International Monetary Fund, in a monumental agreement that could lead to the reduction or total eradication of crypto use in the Latin American country.
The IMF-Argentina Debt Deal
After an extended debate at the congress, the IMF debt restructuring deal supported by president Alberto Fernandez was passed with 56 senators voting in favor while 13 voted against it, along with three neutrals.
The deal comes with a clause aimed at limiting crypto adoption in the hyperinflation-battled nation.
In a recent letter signed by both the IMF and Argentina, the regulatory body stressed that the discontinuous use of cryptocurrency will reduce money laundering and other financial crimes.
The letter read in part:
“To further safeguard financial stability, we are taking important steps to discourage the use of cryptocurrencies to prevent money laundering, informality, and disintermediation.”
The letter of intent also stated that though commercial banks remain strong and well-capitalized, strong oversight of banks is needed especially following stringent policies that were put in place to tackle the covid-19 pandemic.
Argentina, a leading grain-producing nation is also marching forward with its bank digitization process to improve the efficiency, costs of payments systems, and cash management
The South American country’s center-left Peronist government led by Fernandes, has been chasing the deal with the international moneylender for a while, secured it at the beginning of March, and got it approved by the chamber of deputies.
The deal lays out a fresh schedule of financing over 30 months to replace a catastrophic $57 billion program from 2018 that the nation has been unable to pay back due to years of recession and hyperinflation and COVID-19.
IMF Still Wary of Bitcoin
While experts in the crypto industry, as well as top digital assets analytics platforms such as Chainalysis, have made it clear time without number that fiat monies like the U S. dollar are better tools for bad actors than Bitcoin and other cryptocurrencies, the IMF still sees nothing good in the revolutionary digital asset class
The organization has overtime openly expressed its concerns over the exponential rise of cryptocurrencies and the little to no level of regulation involved in transaction processing.
One of the issues that the IMF has raised is that most of the individuals and financial companies trading these assets lack adequate operational, governance, and risk practices.
The organization says investors are at risk of losing their money because crypto lacks adequate oversight and disclosure.
The financial body also strongly suggests that digital assets can open some “unwanted doors” and can be used to launder dirty money, aid firms, and countries to avoid international sanctions, and can also facilitate the financing of terrorists.
With El Salvador already making steady progress in its Bitcoin-integration journey, despite serious criticisms from the IMF, it appears the agency is now ready to do everything within its powers to discourage other forward-thinking nations from embracing crypto.
