Argentina's Central Bank Banning Payment Providers From Offering Crypto Services
How do you get into crypto and buy cryptocurrency with fiat currency? Probably you use crypto exchanges or some sort of crypto services offered by payment providers. You can use your fiat currency and buy crypto. What if those payment providers stop facilitating crypto services?
Argentina's central bank recently banned payment providers from offering crypto-related services, so they cannot make crypto transactions. You know someone in person, send him fiat currency and he gives you cryptocurrency in return. You can still do that to get into crypto from anywhere.
But you can guess it makes it difficult to on-ramp and off-ramp crypto when payment providers halt their crypto services. According to the local media report, payment providers do not make any comment about this decision. People cannot get access to crypto easily even though they want to invest and hold crypto.
While we are talking about Web 3.0 and blockchain technology, and how it can benefit and add value to people's lives, the restriction put by the central authority will not help the adoption of cryptocurrency. People from other parts of the world get the benefit from the latest technology since they have easy access.
Despite difficulties, crypto adoption is on the rise and hyperinflation increases the adoption of cryptocurrency in Argentina. Is your income increasing? Even if your income increases, that fails to catch up with inflation miserably.
This is a tough situation where people have to think seriously about how they can hold the purchasing power that they lose every single day. Argentine Peso drops its value against the US dollar. This rapid devaluation against the US dollar is an alarming sign.
People use stablecoins to buy goods and services. According to Chainalysis, more than 30% of consumers use stablecoins to buy products in Argentina. The bank does not like to see the devaluation of the fiat currency while people see crypto as a solution.
The ban on payment providers from offering crypto transactions is an attempt to lower the exposure to the crypto. I do think every central authority will do its best to hold power and control over the monetary system. You cannot expect they will welcome something like crypto that can be a threat to the existing system.
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What happens is that they want to avoid adoption because they cannot control cryptocurrencies at the pleasure of governments. In my country, people have used cryptos and foreign currencies to avoid devaluation and inflation. They have been one of the best ways.
Currently there are some political and economic problems due to the robbery and fraud of important politicians in the national oil company. I don't know how it can affect citizens and the adoption of cryptos. But, I know that it can have a bit of a reputational impact because some people are unaware of the processes, and may feel insecure with the crypto concept.
However, I believe that with sufficient education it is possible to have a better adoption.