IMF at it again: Argentina edition

IMF at it again: Argentina edition

IMF at it again: Argentina edition

The IMF and the Argentinian government have closed a deal to make available a further $45 billion for the purpose of improving financial stability in the South American nation over the next ten years, but this deal also includes a policy against cryptocurrencies.

Imminent Default

Given the Argentinian context of “preventing an imminent default” in the country’s economy, both the Minister of Economy and the President of the Central Bank have accepted a series of harsh financial restrictions which, amongst other things, "discourage the use of cryptocurrencies with a view to preventing money laundering, informality and disintermediation.”

The IMF has not clarified how exactly cryptocurrency would affect financial stability in the country where citizens have famously used Bitcoin and stablecoins as a safe haven against the debilitating inflation of the Argentinian Peso.

NGO Bitcoin Argentina, an organization dedicated to promoting education on cryptocurrencies and blockchain, has asked in an official letter to the Minister of Economy more information about the statement but didn't receive an answer before the bill was approved by the Senate last Thursday.

Terms & Conditions Apply

The agreement comes within months of the IMF urging El Salvador to reverse the decision to make Bitcoin legal tender; a suggestion which also arrived as a caveat before a potential IMF loan.  

Some researchers have suggested that the IMF has a history of leveraging economic situations in developing countries in order to attach conditions to their loans. Such conditions are purportedly set to increase economic extraction from global corporations through the free market, and to secure the payback by increasing taxes, reducing welfare, and cutting wages.

Critics suggest that IMF loans adversely affect the poorest in the society, and that economic decisions should be discussed internally and democratically, rather than dictated by a third external party.

Franco Amati, one of the founders of Bitcoin Argentina, told Exodus:

"The IMF seek to prevent "disintermediation", but only in the mind of a bureaucrat can such a word have negative connotations. My suspicion is that they want to avoid new attempts at state financing via Bitcoin like the one in El Salvador. We will see in the coming months how much the Argentine government obstructs startups, workers and users of the sector, but to me the plan to "discourage the use of cryptocurrencies" is unrealistic."

The vote was passed on Thursday with 56 votes for and 13 against. It will later be signed off by the IMF, and will be the country’s 22nd accordance with the organization.

This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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