Argentine lawmakers propose Bitcoin wages in new bill

With El Salvador passing a law making Bitcoin legal tender, lawmakers in many Latin American countries have expressed interest in Bitcoin. These countries include Paraguay, Argentina, Panama, Brazil, and Mexico. Tonga and Tanzania have also reportedly expressed interest in Bitcoin. Recently, Argentine lawmaker José Luis Ramón submitted a new bill that, if passed, would allow workers to receive wages in Bitcoin and other cryptocurrencies.
Ramón claims the plan could preserve employees’ purchasing power while increasing their financial autonomy. Under the proposed bill, workers could choose to have their wages paid in full or in part in cryptocurrency. Argentines working abroad wouldn’t have to convert their earnings into pesos when they return home. However, for Argentina, these are just proposals at this point.
Argentina ranks high in cryptocurrency adoption along with other Latin American countries such as Venezuela, Brazil and Peru due to economic turmoil. Previously, the government of El Salvador also discussed paying employees in Bitcoin.
In fact, Argentina’s sluggish economy, high inflation, monetary deflation, and shortage of U.S. dollar investments are a shot in the arm for the development of cryptocurrencies.
The crypto craze continues to surge in Argentina. Public data shows that as of May 2021, there are an estimated 2 million crypto trading accounts in Argentina, a country with a population of 45 million.
In addition, over the past few months, more than 1 million Argentines have been buying cryptocurrencies, most of whom are buying Bitcoin and stablecoins such as USDT, USDC, and DAI, according to local media Ámbito. The media also emphasized that stablecoins have begun to gain momentum in 2019 due to the dollar purchase cap implemented in Argentina. Users believe that such tokens are a more efficient way to convert Argentine pesos into dollars. In addition, Ethereum's adoption rate is also increasing in the country.
It is worth mentioning that amid economic uncertainty and the government's massive electricity subsidies, more and more Argentine residents are turning to Bitcoin mining. Earlier this year, Argentina's Bitcoin searches on Google surged.
With the active crypto activities, Argentina's central bank and securities regulator recently issued a joint statement warning the public to be cautious when investing in cryptocurrencies. The statement said that investing in cryptocurrencies "may cause significant financial losses to holders, including the possibility of losing all investment principal." The statement also pointed out that despite the risks, cryptocurrency trading has not yet reached a level of widespread use and acceptance in Argentina.
Relevant regulation in Argentina is also on the agenda. As early as April, the Central Bank of Argentina (BCRA) required banks operating under its jurisdiction to obtain and provide detailed information on all customers who use cryptocurrency transactions. In a form leaked on Twitter by the local Bitcoin community, the Central Bank of Argentina commissioned the domestic bank to provide information about each customer's unique tax identification code (CUIT), address, account number, account type, and the name of the person authorized to use the account. The accompanying information further stated that the data request was necessary and fell within the scope of BCRA's business because it had a "monitoring function for payment systems." The Central Bank of Argentina later confirmed the authenticity of the form to a local news platform, adding that the purpose of this work was to determine whether crypto assets needed greater regulation in the country.
In May, Argentina's Federal Public Revenue Administration (AFIP) issued a "Form 8126" and forwarded it to every digital asset exchange operating in the country to comply with the new regulations. Companies must fill out the form before the 15th of the month following the reporting month. Exchanges should report "a list of accounts used to identify each customer; registrations, cancellations and modifications that occurred; total income, expenditures and final monthly balances of wallets". Payment gateway MercadoPago will be subject to AFIP's review.