Already grappling with high inflation and sovereign debt1, Argentina was hit hard by the COVID-19 pandemic. The Argentine economy—the third-largest in Latin America2—contracted by 9.9% in 20203, urban poverty skyrocketed to 42% in the second half of 20204, and severe case loads have strained the healthcare system5. The Bloomberg Misery Index for 2020 ranked Argentina as the world’s second-most miserable economy due to high inflation and unemployment rates.
Argentine regulators must accelerate digitalization initiatives in order to stabilize the economy, achieve its sustainable development goals and guide the post-pandemic recovery. The health crisis has already boosted digital transformation in Argentina, and Argentina ranked high on digital evolution momentum in the 2020 Digital Intelligence Index (DII). The index, developed by Tufts University’s Fletcher School and Mastercard, praised the state for continuing to make progress in strengthening its “digital friendly institutions.”
Argentina’s 2021 digital agenda, though scant, shows the state’s commitment to digital transformation. ATMs are headed towards biometric authorization, and regulators have signaled an interest in bolstering cybersecurity. In June 2021, the Chamber of Deputies of Argentina issued a draft resolution seeking feedback on questions related to cybercrimes, in reaction to the rise of cybercrime in the country. Digital payments are likely to be an issue to watch, especially as cryptocurrency investments soar amidst high inflation. On 11 August 2021, central bank president Miguel Pesce stated that a possible regulation on bitcoin transactions was upcoming6, and that the bank did not plan on developing a central bank digital currency (CBDC)7. President Alberto Fernandez, however, has expressed openness towards cryptocurrencies and their possible advantages8.
Support for fintech, a modern and revamped payments system, improvements to digital infrastructure and expansion of digital access will be crucial in promoting financial inclusion, competitiveness and innovation. Regulators must especially look towards developing a national digital identity system in securing the digital economy and society. Although figures vary widely, the most recent World Bank data revealed that a mere 49% of the adult population in Argentina was banked in 20179.
Financial Regulatory Authorities
The Central Bank of the Argentine Republic (BCRA) is the central bank of Argentina.
The National Directorate for Personal Data Protection (PDP) is Argentina’s national data protection authority, established by the National Data Protection Act.
The National Securities Commission (CNV) supervises and regulates equity markets in Argentina.
Policy, Laws and Regulations
Verification Measures for Digital Wallets, 01 August 2021
The central bank issued Communication A 7326, which requires that financial entities and payment service providers offering payment accounts through a digital wallet or a similar service to adhere to certain verification measures. Obliged entities must verify the identity of a person who opens an account; associate with the digital wallet only the payment instruments or accounts of the holder of the wallet; conduct user authentication and identification per access to the wallet; and allow more than one owner per payment account. The measures must be traceable and auditable10. The communication went into effect 01 August 2021.
The province of Misiones approved the Missionary Financial Innovation Program with Blockchain and Cryptocurrency Technology law, which seeks to harness innovative technologies in digitalizing government services, boosting efficiency and confronting climate change. Blockchain will be utilized to issue government certificates and other documents currently issued by paper11, and the law also outlines a plan to issue a provincial stablecoin.
Alert on Risks and Implications of Cryptoassets, 20 May 2021
The central bank and the National Securities Commission (CNV) issued a joint alert on the risks and implications of cryptoassets. The alert notes that cryptoassets are not legal tender, are highly volatile, can facilitate operational disruptions and cyberattacks, do not have safeguards and can facilitate money laundering and terrorist financing. Providers of cryptoasset services may also fail to disclose information and risks, and investors may be susceptible to fraud. Due to the cross-border nature of cryptocurrency operations, Argentine investors have less recourse to Argentine authorities and courts in the case of a conflict.
In April 2021, the central bank issued a note requesting that banks identify clients who conduct operations using cryptoassets. Banks must supply the client’s name, address and number and type of account12.
Guidelines for Response and Recovery from Cyber Incidents, 17 April 2021
The central bank published a communication—applicable to financial institutions, payment service providers and financial market infrastructures—on Guidelines for Response and Recovery from Cyber Incidents. Per the communication, management is responsible for defining cyber resilience objectives and implementing the related policies and controls. Management must cultivate an organizational environment in which cyber incidents are properly reported or escalated, establish training programs for all staff levels and “[p]romote continuous and sustained actions with suppliers and third parties in preparing cyber-incident response and recovery tasks, so that they can be timely and adapt to different situations.” Metrics must be established in evaluating the impact of cyber incidents and the subsequent responses, and contact lists of internal and external stakeholders must be made so that cyber incidents are properly disclosed to relevant parties, when appropriate.
Biometric Access to ATMs, 22 January 2021
The central bank issued a circular outlining rules on ATM access through the use of fingerprint readers. Per the new rules, users shall access ATMs through “something you know”—a pin or identity card (DNI)—alongside fingerprints. The rules will be implemented through a phased approach. By 31 December 2021, 35% of ATMs are required to include a biometric reader; that number increases to 60% by 30 June 2022, and by 31 December 20222, all ATMs will be required to include a biometric reader.
Wage Perception Regime in Cryptocurrencies, 05 July 2021
Congressman José Luis Ramón introduced a bill on the Wage Perception Regime in Cryptocurrencies to the Senate and the Chamber of Deputies of Argentina. If enacted, the bill would allow Argentine employees—including self-employed workers who export services abroad—to receive full or partial payment in cryptocurrency. Employers would have to take on the costs of the cryptocurrency transfer13. The Argentine annual inflation rate reached 50% in 202114, and citizens have flocked to cryptoassets as a hedge against inflation and an uncertain future.
Crime of Impersonation of Digital Identity, 06 May 2021
The Senate and the Chamber of Deputies of Argentina introduced a bill seeking to include the crime of impersonation of digital identity in Article 139 of the National Penal Code. Anyone who adopts, creates or appropriates the digital identity of a person or legal entity—without their consent—with the intention to commit a crime shall face imprisonment from one to three years. In the case that the crime occurs continuously, forces the victim to alter their life or the victim is under the age of 18 years old, the perpetrator shall face a prison sentence of four to six years.
1. Arnold-Parra, Samuel. “Cry for me, Argentina: COVID-19 and Economic Woe.” Global Risk Insights, 26 January 2021. https://globalriskinsights.com/2021/01/cry-for-me-argentina-covid-19-and-economic-woe/
2. Romero, Teresa. “Gross domestic product (GDP) in Latin America and the Caribbean in 2020, by country.” Statista, 05 July 2021. https://www.statista.com/statistics/802640/gross-domestic-product-gdp-latin-america-caribbean-country/
3. “The World Bank in Argentina.” The World Bank, 05 April 2021. https://www.worldbank.org/en/country/argentina/overview
4. “The World Bank in Argentina.” The World Bank, 05 April 2021. https://www.worldbank.org/en/country/argentina/overview
5. Alcoba, Natalie. “Argentina Is the Pandemic’s Latest Hot Spot.” Foreign Policy, 04 June 2021. https://foreignpolicy.com/2021/06/04/argentina-is-the-pandemics-latest-hot-spot/
6. Goschenko, Sergio. “Central Bank of Argentina President Hints at Possible Regulation of Bitcoin in Payment Systems.” Bitcoin.com, 14 August 2021. https://news.bitcoin.com/central-bank-of-argentina-president-hints-at-possible-regulation-of-bitcoin-in-payment-systems/
7. Haig, Samuel. “President of Argentina open to Bitcoin and a CBDC, but central bank says no.” Cointelegraph, 13 August 2021. https://cointelegraph.com/news/president-of-argentina-open-to-bitcoin-and-a-cbdc-but-central-bank-says-no
8. Goschenko, Sergio. “President of Argentina Open to Adopting Cryptocurrencies as Legal Tender.” Bitcoin.com, 16 August 2021. https://news.bitcoin.com/president-of-argentina-open-to-adopting-cryptocurrencies-as-legal-tender/
9. “The Global Findex Database 2017.” Demirgüç-Kunt, Aslı et al. https://globalfindex.worldbank.org/
10. “Billeteras Virtuales: nuevas medidas de seguridad para pagos electrónicos.” Editorial Errepar, 13 July 2021. https://blog.errepar.com/billeteras-virtuales-nuevas-medidas-de-seguridad-para-pagos-electronicos/
11. Goschenko, Sergio. “Argentinian Province Misiones Plans to Issue Its Own Stablecoin.” Bitcoin.com, 23 July 2021. https://news.bitcoin.com/argentinian-province-misiones-plans-to-issue-its-own-stablecoin/
12. Malwa, Shaurya. “Argentina’s central bank is asking citizens to disclose their Bitcoin.” CryptoSlate, 06 April 2021. https://cryptoslate.com/argentinas-central-bank-is-asking-citizens-to-disclose-their-bitcoin/
13. Engler, Andrés. “Argentine Lawmaker Proposes Bill for Businesses to Pay Employees in Crypto.” CoinDesk, 07 July 2021. https://www.coindesk.com/argentine-lawmaker-proposes-bill-for-businesses-to-pay-employees-in-crypto
14. Nessi, Hernan and Jorge Iorio. “Argentina's annual inflation rate tops 50% as global prices soar.” Reuters, 23 July 2021. https://www.reuters.com/world/americas/argentina-inflation-seen-year-low-32-june-likely-reheat-2nd-half-2021-07-15/
*DISCLAIMER: This information is OneSpan's interpretation of the compliance requirements as of the date of publication. Please note that not all interpretations or requirements of the applicable laws are well-settled and its application is fact- and context-specific. The information contained in this document should not be relied upon as legal advice or to determine how the law applies to your business or organization. We encourage you to seek guidance from your legal counsel with regard to law applying specifically to your business or organization and how to ensure compliance. This information is provided “as-is” and may be updated or changed without notice. OneSpan does not accept liability for the contents of these materials.
Last updated: November 2021