It’s been a tough 2014 for Argentina. After its economy struggled to grow in 2013, its GDP actually contracted by 0.8% on an annualized basis during the first quarter. To combat soaring inflation caused by years of its growing money supply, the central bank started issuing notes with yields of 30% in February.
The country has lowered growth forecasts for this year, in part to comply with IMF demands that Argentina clean up its data and statistics.
At least Bitcoin can offer hope, so it was thought. Its deflationary nature would be ideal, providing a stable store of value as the country’s currency deteriorates.
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These hopes were partially dashed when the Unidad de Información Financiera (UIF) recently required all financial services companies to file monthly reports of all transactions made in digital currencies. The UIF is Argentina’s anti-money laundering (AML) watchdog, the equivalent of FinCEN in the US or FINTRAC in Canada. The watchdog was particularly concerned about how the same digital currency can flow to and from other jurisdictions that do not implement AML or terrorist-financing (TF) controls.
Bitcoin advocates view the move as a sign of continued restrictions against Bitcoin in the country.
And if there was still something left to cheer for, their beloved football team was ousted, just barely, by Germany in the World Cup final last night.
Reading between the lines, there is at least a silver lining: if they need to report on their virtual currency transactions, it must mean that financial services companies aren’t barred from dealing in it. This contrasts with China, whose central bank banned both financial institutions and payment processors from transacting in it last December. The announcement caused Bitcoin’s value to crash following weeks of multifold gains.