Latam Insights: Cryptocurrency Developments in Latin America
In the latest edition of Latam Insights, we explore significant developments in the cryptocurrency landscape across Latin America over the past week, notably highlighting Brazil’s skepticism towards Bitcoin reserve initiatives and Argentina’s proactive steps towards tokenization and crypto payments.
Brazil’s Skepticism Towards Bitcoin Reserves
Amid a series of discussions this week in Brazil’s congressional hearings regarding the prospective approval of Bill 4501/2024, which would enable the Central Bank to invest as much as 5% of its foreign reserves in Bitcoin, officials expressed strong reservations. Luís Guilherme Siciliano, director of the International Reserves Department at the Central Bank, stated that Bitcoin does not meet the necessary criteria for reserve assets, reinforcing the classification by the International Monetary Fund (IMF).
“The IMF sees Bitcoin as a non-financial, non-produced asset akin to land,”
He elaborated that only a small fraction—3%—of central banks worldwide are contemplating similar strategies to adopt Bitcoin as a reserve asset.
Argentina’s Steps Towards Tokenization
In contrast, Argentina is making strides towards integrating decentralized technologies into its financial framework. The country’s securities regulator, known as the CNV, recently enacted General Resolution 1081, an important legislative step allowing both local and international stocks, as well as various securities such as financial trusts and shares in closed-end mutual funds, to be issued via decentralized technologies as tokens.
This initiative follows a public consultation from April and aims to modernize securities trading by enabling the issuance, liquidation, and trading of asset tokens on decentralized platforms, such as blockchain, with official recognition from relevant institutions.
Buenos Aires and Cryptocurrency Adoption
On a municipal level, Buenos Aires is also taking steps to enhance cryptocurrency adoption, capitalizing on its large population of crypto enthusiasts. Recent statistics indicate that over 10,000 residents in the city are already involved in receiving payments in digital currencies.
The city’s new initiative, dubbed BA Crypto, aims to position Buenos Aires at the forefront of cryptocurrency adoption globally. With this program, residents can now pay for several municipal taxes, such as housing permits and traffic fines, using cryptocurrency.
A QR-based payment system has been launched to facilitate crypto transactions, and future plans include a universal payment infrastructure that will allow transactions from any crypto wallet directly to the municipal system.
