Argentina’s new government plans to simplify crypto legalisation

• Argentina’s new government, led by Javier Milei, plans to simplify the legalisation process for cryptocurrency holdings, even for those with overdue tax declarations.
• The “Law of Bases and Starting Points for the Freedom of Argentines” introduces an asset regularisation scheme allowing taxpayers to legalise crypto assets without additional documentation.
• This move aligns with Argentina’s broader economic reforms and a decree allowing the use of cryptocurrencies under certain conditions.

Argentina’s new government, led by self-proclaimed libertarian Javier Milei, has announced plans to streamline the process of legalising cryptocurrency holdings, even for those who have previously missed tax declarations.

On December 27, the Argentine Congress introduced the “Law of Bases and Starting Points for the Freedom of Argentines,” a comprehensive 351-page bill that encompasses various reforms across tax, labor, criminal, energy, and electoral domains, aligning with Milei’s reformist agenda.

The bill includes provisions related to “asset regularisation schemes” which outline the types of assets that taxpayers can legalise without the need for “additional documentation” to prove their origin.

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Flat Tax on Assets

To motivate compliance, the bill introduces a flat tax on assets. Taxpayers who declare their holdings by the end of March 2024 will incur a 5% tax, while those who do so between April and June 2024 will face a 10% tax. Declarations made between July and September will be subject to a 15% tax.

In December, Argentina’s Minister of Foreign Affairs, International Trade, and Worship, Diana Mondino, mentioned a decree aimed at economic reform and deregulation that could permit the use of Bitcoin and other cryptocurrencies in the country under specific conditions. While the decree, “Bases for the Reconstruction of the Argentine Economy,” didn’t explicitly mention crypto, it included provisions allowing debtors to make payments in non-legal tender currencies.

Javier Milei assumed leadership amid rising inflation in Argentina. The president has previously referred to Bitcoin as a move toward “the return of money to its original creator, the private sector.” Although he has not publicly commented on digital assets since taking office, the Argentine government’s willingness to simplify crypto legalisation signals a change in the country’s stance on cryptocurrencies.

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Latin American Crypto Movements in 2023

Latin America emerged as a hotbed for crypto adoption in 2023, driven by economic instability, tech-savvy populations, and a growing awareness of crypto’s potential. Here’s a look at some key movements:

High Adoption Rates

• Latin America boasts the 7th largest crypto economy globally, surpassing Sub-Saharan Africa and rivalling regions like MENA and Eastern Europe.
• Venezuela and Argentina lead the pack due to hyperinflation and currency devaluation, with citizens seeking crypto as a hedge against their volatile economies.

Regulatory Developments

• MiCA’s influence: While the Markets in Crypto-Assets (MiCA) regulation applies primarily to the EU, it sets a global precedent for crypto regulation and influences discussions in Latin America.

. Stablecoin Boom

• Stablecoins, pegged to stable assets like USD, saw widespread adoption as a safe haven and inflation hedge.
• Argentina’s Mendoza province even allowed tax payments in crypto, a first for the region.

Bitcoin Beach & Beyond

• El Salvador’s adoption of Bitcoin as legal tender, while controversial, put the country on the crypto map and inspired similar initiatives in Honduras and Guatemala.
• Local businesses in tourist destinations like Santa Lucia, Honduras, started accepting Bitcoin, showcasing real-world use cases.