September 24, 2023

Central Bank of Argentina Preparing New Regulations for Digital Wallets

According to reports, the Central Bank of Argentina is working on developing a new group of regulations that are aimed at controlling all the digital wallets that exist in the country. The purpose of this new legal framework would be to stop fraud, which these tools are said to perpetuate and facilitate. The local media has leaked that the publication of the said law could come soon. The report indicates that the directory of the bank is coming up with a new set of regulations that will help them understand exactly what is happening with the funds stored in digital wallets and also enhance their KYC measures.

The Central Bank of Argentina said that its goal was not to prohibit anything but to implement the same rules that are applicable on banks when it comes to knowing their customers. They further added that these new rules would be implemented because of the increasing cases of fraud involving these tools, along with the fact that some companies do not do their due diligence when they are taking on customers. It was also clarified by members of the central bank that they will apply the rules on a case-by-case basis because every wallet functions differently.

In addition, the measure will assist the bank in controlling the number of users that are currently utilizing digital wallets, such as Mercado Pago, which has about 30 million users. The Central Bank of Argentina had crippled the opportunity of the companies to make a profit from investing the funds of their clients when it established that they would have to preserve 100% of the funds deposited by their clients in their bank accounts. While a new legal framework is being developed by the Argentinian central bank regarding digital wallets, the Argentinian Tax Authority called the AFIP has already announced that it would confiscate the funds of taxpayers in digital wallets, if they have debts.

It is expected that the coming months will see almost 10,000 people have the funds in their digit wallets confiscated. As a matter of fact, it is possible that the AFIP may have already executed this plan because according to local media, there have already been a few cases where the funds have been seized. It has been reported that the AFIP requested the first confiscation and the institution had been authorized by a judge to take over the funds of the user in their digital account in order to use them for paying off the debt they had accumulated.

However, it was reported that the state had first attempted to seize the user’s bank account. Only after this action had failed that they turned to seize their digital wallet and had received permission to do so. If they have received permission, it is likely that they would continue this practice in the future as well. Thus, any Argentinian with tax debts would lose funds they have in their digital wallet to the tax authority because they will be seized for repayment purposes.

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