The non-government organization Bitcoin Argentina presented a draft bill to regulate the cryptocurrency market in a way that upholds decentralization and builds public trust. The proposal was introduced by Bitcoin Argentina’s president Ricardo Mihura at LABITCONF 2023 in Buenos Aires, Argentina on November 10. Previously, Bitcoin Argentina had rejected the idea of regulating the industry. However, they now argue that it is necessary to preserve the blockchain and hold bad actors accountable to the fullest extent of the law.
Mihura stated, “We have always rejected attempts to regulate the crypto economy, but this time we set ourselves the goal of giving a positive response, with only two purposes: preserving decentralization and protecting savings and public trust,” adding, “We cannot close our eyes to the number of dishonest actors and projects that circulate with the blockchain brand.”
The proposed legal framework focuses on categorizing cryptocurrency platforms and service providers into three groups to establish property rights: decentralized, local centralized or willing to dialogue with authorities, and global centralized. Platforms in the two centralized categories would be allowed to operate freely, but their customers would be granted “the broadest possible judicial protection,” guaranteeing the right to claim damages in the event of a company downfall. Argentina’s judiciary would not intervene on failures from decentralized platforms. Courts would determine whether a cryptocurrency platform is sufficiently decentralized when resolving claims by allegedly injured customers.
Mihura emphasized that an outright ban on cryptocurrencies wouldn’t work due to the global nature of blockchain. He stated that not even the United States can effectively prohibit the operation of the unlicensed cryptoeconomy, and that it doesn’t make sense for Argentina to propose a top-down ban. Instead, he proposed the best that the law can offer to its citizens, including holding those directly responsible and all those who profit in the marketing chain of a fraud accountable until the final victim.
The proposed bill comes ahead of Argentina’s presidential run-off election between Sergio Massa, the country’s economy minister, and Javier Milei, an economist turned politician who wants to abolish Argentina’s central bank and adopt the United States dollar. This is significant as Argentina is currently facing an inflation crisis, with the country recording the fourth largest annual inflation rate in the world at 121.7% over the last 12 months.
In summary, the draft bill presented by Bitcoin Argentina aims to regulate the cryptocurrency market while preserving decentralization and strengthening public trust. The proposed framework would categorize platforms and service providers into three groups, ensuring property rights for customers and holding bad actors accountable under the law. This comes at a crucial time for Argentina as the country grapples with significant economic challenges, making it important to find a balance that both supports innovation and protects consumers.