After rejecting the motion for a digital currency in 2021, Argentina’s apex bank is allegedly working on legislation regulating all virtual wallets in the nation. The new legislative system aims to prevent financial crime, which has been made easier by these technologies. The bill is expected to be published soon, as reported by local media sources.
The Central Bank Shoots At Electronic Wallets
The usage of virtual wallets is a priority for Argentina’s national bank. The bank’s director is said to be working on a set of legislations to fully comprehend what’s going on with the money in these wallets and strengthen their KYC procedures. As mentioned by the central bank,
“This is not about enforcing restrictions of any kind; it’s about following the same regulations that commercial banks must follow now when it comes to client identification.”
The financial institution stated that it is enacting these new restrictions because of the high level of fraudulent activities associated with the use of these technologies, and some organizations fail to perform thorough research when onboarding clients. Because not every digital wallet works similarly, officials of the apex bank underlined that the regulations would have to be enforced on a case-by-case approach.
The action would enable the financial giant to oversee the existing stream of consumers who use e-wallets such as Mercado Pago, which is believed to have over 30 million users. In 2021 Argentina’s national Bank mandated that these firms keep 100% of their clients’ assets in their accounts, thereby eliminating the ability of these enterprises to earn money from investments made using a part of these assets.
Digital Wallets Are Already Being Seized
Although the Central Bank is developing this legislation for electronic wallets, the Argentinian Tax Authority (AFIP) has already taken steps to seize monies in taxpayers’ electronic wallets, which are yet to pay their tax. About 10,000 taxpayers’ digital wallets are likely to be seized in the following months.
According to local media, the first occurrence of these confiscations has already taken place, indicating that the strategy is already in action. The AFIP allegedly demanded the first seizure, and a court granted the agency the power to take possession of the monies in the electronic wallet to pay off the user’s debts. At first, the authorities attempted to take the taxpayer’s bank accounts, but the result was unfavorable. This move by the central bank is because most taxpayers are allegedly hiding their money in digital wallets.