Argentinian bank Ualá suspends its crypto business
Argentinian fintech company Ualá will suspend its operations in the cryptocurrency market due to a regulation issued by the Central Bank of Argentina (BCRA) last week. The regulation prohibits virtual wallets or Payment Service Providers Offering Payment Accounts (PSPCP) from carrying out operations with digital assets or assisting their clients in carrying out such operations.
Ualá, founded by Pierpaolo Barbieri, has around 300,000 users who will be required to sell their cryptocurrencies within 30 days. The company will pay a 5% fee in pesos for the sale at a rate comparable to the MEP dollar.
The suspension takes effect despite the fact that the cryptocurrency wallets in the market have not altered their offerings. Ualá had allowed users to purchase and store Bitcoin and Ethereum, the two most popular cryptocurrencies. However, due to the BCRA regulation, the company will no longer be able to operate in the digital asset market.
A spokesperson for Ualá noted that suspending their operations in the cryptocurrency market is unfortunate, as it was just one more option within their broad investment menu. The application, with about 2 million users, will still allow users to invest in a Common Investment Fund (FCI), MEP Dollars, and CEDEARs. These items will continue to function normally.
Ualá had launched its services for trading Bitcoin and Ethereum back in November. The platform did not allow withdrawals but instead only facilitated purchases and trades of cryptocurrencies. Users were required to have a minimum transaction of 250 pesos at that time.
The Central Bank of Argentina’s decision not only impacts Ualá but also marks a shift in the country’s stance towards digital assets. It appears that the regulator is tightening its policies to limit the expansion of the cryptocurrency market within the country.
Some analysts believe that the measures taken by the Argentine government and central bank may adversely affect the growing adoption of cryptocurrencies in the country. However, others argue that such actions are necessary to protect consumers from potential risks associated with these digital assets.
In recent years, cryptocurrencies have gained significant popularity in Argentina due to high inflation, strict currency controls, and economic instability. Many residents have turned to digital assets as an alternative investment option and a way to protect their wealth from depreciating local currency.
Cryptocurrency exchanges and other related businesses have also grown in the country as a result of the increasing demand for digital assets. However, the recent regulatory changes may pose challenges to the continued growth of the industry.
Ultimately, the future of cryptocurrencies in Argentina will depend on how the government and regulators respond to the rapidly evolving digital asset landscape. If they adopt a more supportive stance, the market could continue to flourish; if not, the industry may be stifled by regulatory barriers.
In conclusion, Ualá’s suspension of its crypto operations due to the Central Bank of Argentina’s regulation marks a significant change in the country’s approach towards the digital asset market. It remains to be seen how this development will impact the growth and adoption of cryptocurrencies in Argentina and whether the regulator’s decision will have a lasting effect on the industry as a whole.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
