The Virtual Currency Regulation Review: Argentina

Introduction to the legal and regulatory framework

Argentina is a regional leader in the adoption of cryptocurrencies, and is still making inroads in this regard. As a result of economic instability and foreign exchange restrictions, Argentina became one of the earliest adopters of cryptocurrency in Latin America (and the world) in an effort to protect its savings against inflation and to overcome the prohibition on purchasing and transferring foreign currency abroad.

Cryptocurrencies are not prohibited in Argentina, and are therefore legal. Nevertheless, the government has issued regulations regarding cryptocurrencies related to taxation and the prevention of money laundering and the financing of terrorism.

The government has not implemented specific regulations on the issuance, exchange or, in general, use of cryptocurrencies, instead choosing to observe ongoing developments regarding the impact of cryptocurrencies in the Argentine market.

Securities and investment laws

There is no specific regulation applicable to the sale of cryptocurrencies or other tokens under securities laws or investment laws in Argentina.

Given the lack of a central issuing authority, Bitcoins cannot be classified as securities. Under Argentine law, securities are essentially negotiable instruments into which their issuers incorporate credit rights. Nevertheless, this conclusion may not be extended to other cryptocurrencies (tokens) issued by a centralised entity.

Following the example of securities and exchange commissions in other parts of the world, the National Securities Commission (CNV) issued a communiqué on initial coin offerings (ICOs) to warn investors of their potential risks.

The CNV has clarified that ICOs would not, in principle, be subject to regulations regarding the capital markets. Nevertheless, it has also stated that, depending on their structure and particular characteristics, certain ICOs may be subject to the control of the CNV.

The communiqué further warns investors about the following potential risks associated with ICOs:

  1. a lack of specific regulations;
  2. price volatility and liquidity risks;
  3. the probability of fraud;
  4. inadequate access to relevant information;
  5. the early stage of projects;
  6. the probability of technological and infrastructure failures; and
  7. the transnational nature of transactions involving ICOs.

Although the CNV states that ICOs are not, in principle, subject to specific CNV control, the communiqué clarifies that claims may be filed with the CNV in cases where there is a suspicion that an ICO could be fraudulent.

Although there are no specific prohibitions, given the current lack of certainty in connection with the possibility of considering certain cryptocurrencies as securities under the Capital Markets Law,2 regulated entities subject to the CNV's control, such as investment managers, investment advisers and fund managers, tend not to operate with such assets.

Additionally, the formal requirements for the operational activities of such players have not been designed to address cryptocurrencies. Thus, several regulations may act as practical restrictions that hinder the possibility of operating with such digital assets.

Banking and money transmission

In Argentina, cryptocurrencies like Bitcoin are defined by the Financial Information Unit (UIF) as a 'digital representation of value that can be digitally traded and functions as a medium of exchange; and/or a unit of account; and/or a store of value, but does not have legal tender status in any jurisdiction and is neither issued nor guaranteed by any government or jurisdiction'.

The Argentine Civil and Commercial Code (the Civil Code) determines that individuals and legal entities are entitled to all the corresponding rights over the assets that are part of their property. In this regard, the Civil Code classifies assets into two categories: tangible and intangible.

As opposed to those that have a physical entity, intangible assets such as intellectual property and, in general, rights do not materialise in the physical sphere. Thus, as a digital representation of value, cryptocurrencies are intangible assets that are able to form part of individuals' and legal entities' property.

Section 765 of the Civil Code determines that only the Argentine fiat currency can be considered as money, thus excluding any possibility of including cryptocurrencies in such category.

In connection to the possibility of considering cryptocurrencies as currency under Argentine law, Section 30 of the Argentine Central Bank's Charter3 provides a definition that excludes any type of instrument that has no legal tender directly or indirectly imposed by its issuer, or that is not issued with a nominal value lower than 10 times the amount of the highest national money bill in circulation. As such, to date this provision excludes the possibility of considering several cryptocurrencies as currency under Argentine law. Moreover, extensive interpretations of Section 30 of the Charter are prohibited.

In this regard, in May 2014 the Central Bank issued a non-binding press release stating that virtual currencies are not issued by itself or any other international monetary authority, and thus are not legal tender and are not guaranteed by any government. Nevertheless, there have not yet been any local precedents or governmental decisions or communications in connection with any cryptocurrency issued by foreign authorities.

The UIF differentiates between virtual currency and electronic currency, stating that the latter involves the electronic transfer of legal tender, while virtual currency transactions do not involve legal tender.

Anti-money laundering

The only specific regulations related to cryptocurrencies in Argentina are UIF Resolution 300/2014 (the UIF Resolution), which implements additional reporting obligations for certain obliged subjects (see below) under the Anti-Money Laundering Law (the AML Law),4 and the Tax Reform Law5 (see Section IX).

The AML Law lists a number of persons, including financial entities, broker-dealers, credit card companies, insurance companies, public notaries, and certain government registries and agencies, that have, among other things, specific reporting obligations under the AML Law (obliged subjects), and provides for certain general obligations including applying know your customer procedures; reporting to the UIF any transaction suspected of money laundering or terrorism financing; and abstaining from disclosing to their clients or third parties activities performed in compliance with that statute.

The UIF Resolution requires most obliged subjects under the AML Law to report all the transactions performed with cryptocurrencies, regardless of their amount.

Following the Financial Action Task Force's guidelines, the UIF also warns obliged subjects about the risks involved in transactions using cryptocurrencies. In so doing, the UIF also requires obliged subjects listed in the UIF Resolution to monitor strictly any transactions performed with cryptocurrencies by their clients.

Regulation of exchanges

There are currently no specific regulations on exchange activities. However, anyone wanting to publicly offer securities within the Argentine territory needs to request a public offering authorisation from the CNV.

The trading of securities requires a licence from the CNV. Therefore, the exchange of cryptocurrencies as a permanent activity will require a licence if the cryptocurrency being exchanged is a security.

Considering the lack of a central issuing authority, cryptocurrencies like Bitcoin cannot be classified as securities. Nevertheless, this conclusion may not be extended to other cryptocurrencies (tokens) issued by a centralised entity.

Regulation of miners

The mining of Bitcoin and other cryptocurrencies is permitted. There are currently no specific regulations regarding such activity.

Regulation of issuers and sponsors

There are currently no specific regulations on issuers and sponsors. See Section III.

Criminal and civil fraud and enforcement

There are currently no specific criminal or civil fraud regulations regarding the exchange or issuance of cryptocurrencies; therefore, general criminal or civil law should apply, depending on the specific case.


The Tax Reform Law introduced several amendments to the Income Tax Law (ITL) in December 2017 and established several provisions related to 'digital coins' (this is the concept used by the ITL for the first time).

Income derived from the tenure or disposal of digital coins is considered to be from an Argentine source if it is issued by subjects domiciled, established or located in Argentina. If the subjects are domiciled, established or located outside Argentina, the income will be considered to have come from a foreign source.

A 'schedular tax' is applicable to Argentine-source gains derived from the disposal of certain securities, including digital coins, by resident individuals and non-residents (legal entities or individuals). Gains obtained by resident individuals derived from the disposal of digital coins are subject to schedular tax at a rate of 15 per cent.

If resident individuals obtain foreign-source gains derived from the disposal of digital coins, they will be taxed at a rate of 15 per cent.

Resident legal entities will be taxed upon any gain derived from the tenure or disposal of digital coins at the general income tax rate of 30 per cent (whether Argentine- or foreign-source).

In summary, if an Argentine resident acquires digital assets, the disposal of those assets could trigger a taxable income. The losses arising from transactions with digital coins are considered 'special losses' and cannot be offset with income from any other source.

Apart from income tax, the worldwide assets of individuals resident in Argentina are subject to personal assets tax at a rate that varies from 0.5 per cent to 1.25 per cent depending on the overall value of the assets exceeding the tax allowance (2 million pesos). In the case of assets located abroad, the applicable rates are higher pursuant to a sliding scale of 0.7 per cent to 2.25 per cent. In the case of personal assets tax, it is not clear what the criteria are to locate a digital asset.

The transfer or exchange of digital coins is not subject to value added tax.

Other legal considerations

There are no border restrictions or obligations to declare cryptocurrency holdings in Argentina.

There are no reporting requirements for cryptocurrency payments made in excess of a certain value. Currently, the only specific reporting requirements in connection with cryptocurrencies are regulated by the UIF Resolution (see Section IV) and the Tax Reform Law.

Cryptocurrencies must be treated as intangible assets for the purposes of estate planning and testamentary succession. This may potentially change in the future in connection with tokens issued through ICOs, subject to the CNV's view on their legal nature under the Capital Markets Law.

For corporate purposes, cryptocurrencies may be contributed as capital of an Argentine entity. However, as a contribution in kind, these cryptocurrencies must be appraised in advance. The type and requirements of the appraisal will depend on the type of entity receiving the capital contribution.

On 11 March 2019, the Argentine Executive Branch issued Decree No. 182/2019 (the Decree) regulating the Digital Signature Law No. 25,506 (DSL).The Decree created the figure of the 'trusted third-party service provider'. This figure includes the operation of distributed ledger technologies for the preservation of electronic documents, management of smart contracts and other digital services.

Moreover, these services also include the electronic certification, digital identification and other services detailed by the licensing entity established by the DSL. Individuals, legal entities, consortiums, public entities and non-state public entities may be trusted third-party service providers under the Decree.

The Decree has not been further regulated yet. Hence, specific guidelines in relation to the use of distributed ledger technology by trusted third-party service providers are still pending.

In October 2019, the Central Bank limited the ability of Argentine residents holding cryptocurrencies to purchase foreign currency in the official foreign exchange market.

Looking ahead

The continuous development of new technologies gives rise to several economic, legal and financial problems. In this sense, the international community's receptiveness to cryptocurrencies has raised important concerns, and has therefore required different legislation to analyse and study the issue.

In Argentina, the issue is not yet fully developed, and only the Argentine Central Bank and the UIF have issued opinions on the matter. The regulatory authorities have adopted a wait-and-see strategy in connection with cryptocurrencies.

The definition of cryptocurrencies will, without doubt, impact the decision as to whether or not the current legislation in Argentina applies to transactions in which cryptocurrencies are used.

There are currently no sandbox or other programmes intended to promote research and investment in cryptocurrencies. Nevertheless, the Argentine Central Bank has created several research groups, one of which is specifically dedicated to cryptocurrencies and blockchain technologies and is composed of members of both public and private entities with the aim of analysing potential regulatory modifications to enable the use of new technologies within the financial services industry.

Despite the expectations regarding the meeting of finance ministers and central bank governors of the G20 countries in Buenos Aires in March 2018, no regulatory framework or specific guidelines on cryptocurrencies have been issued. There have been discussions concerning the associated risk for consumers and investors, but nothing has been discussed in relation to the way cryptocurrencies should be approached by the authorities, except for a call upon international standard-setting bodies to monitor cryptocurrencies and their risks while evaluating a multilateral response, if appropriate.



1 Juan M Diehl Moreno is a partner at Marval, O'Farrell & Mairal.

2 Law No. 26,831.

3 Law No. 24.144.

4 Law No. 25,246.

5 Law No. 27,430.

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