The debate on the “Digital Economy: Cryptocurrencies, advantages and disadvantages in Argentina”, organized by National Economy and Investment Committee president Silvia Elias de Perez was attended by legal and technological experts speaking about the potential scope of crypto asset growth and the regulations necessary to control it. The meeting, held on November 20, was also attended by Central Bank representatives who discussed the merits and weaknesses of this type of system.

Among those present were ruling party senators (Cambiemos) Federico Pinedo, Silvia Giacoppo, Claudio Poggi and Pamela Verasay and Senator Miriam Boyadjian (Movimiento Popular Neuquino).

Highlights from the different speeches:

Johanna Faliero, CONICET researcher

• “The lack of intermediaries means cost-savings and less bureaucratic processes.”
• “Cryptocurrencies do not tend to lose value but rather gain value over time. Also they are issued using an algorithm.”
• “The volatility of this currency can be placed at risk by bad regulations. As we learn more about these currencies we will get a better understanding of volatility.”
• “One problem is the use of this currency for illegal purposes. This supply of money is not representative of the range of illicit activities carried out using sovereign currency. Other challenges are anonymity, consumer protection. How do we encourage the system to develop without leaving people exposed? We are also concerned about security and privacy.”
• “The regulatory issue lacks uniformity. If we don’t understand how cryptocurrencies operate, we will have regulatory problems and they will be unable to respond to real needs.”
• “One challenge is to regulate in order to protect user rights.”
• “We need answers involving information transparency, and regulation must empower people without suffocating them.”

Francisco José Faliero, engineer and specialist

• “Regulation needs to be both legal and technological.”
• “Cryptocurrencies offer total control over transactions and lower transfer costs.”
• “We should have some elements of transparency in terms of technical platforms and establish another paradigm different to the current state of affairs.”

Emiliano Giupponi, the BCRA’s general sub-manager of Financial Regulation

• “From an economic point of view, we can issue many coins, but it’s necessary to see whether there is a demand or not. Acceptance is very important and hard to monitor.”
• “Anonymity is a risk but it is a reason for demand”.
• “Many currency developments involve irreversible situations and there is no deposit insurance. From an economic standpoint, this is a challenge.”
• “The G20 indicates that there are considerations regarding these currencies and the risks they may entail. Each country’s situation must also be taken into account. At the BCRA, we are saying that some digital assets could lead to a certain event with a lower demand for peso-valued assets or (only) in pesos. That could create certain tension.”

Iván Hundebatt, BCRA General Sub-Manager of Financial Regulation

• “The first challenge is that there is no general consensus on what crypto assets are. Another challenge is the elimination of intermediaries.”  
• “Pseudo anonymity limits true traceability.”
• “In general, regulations are applied following the principle of technological neutrality. In this case, there are some elements limiting this approach, such as who is responsible for failures in the system and when cyberattacks occur.”

Cristian Bruno, Bitcoins expert (Bitex)

• “What the bitcoin achieved is to certify that the person doing the spending is the person who says that they are doing it..
• “The bitcoin has a different type of governance because of the issue of anonymity and the difficulty of deleting records.”
• “This system has achieved great maturity and in 10 years will help us fight more online crimes.”
• “If someone with bitcoin does something wrong, they are only harming themselves because they each have their own ‘keys’. In this sense, it’s similar to the digital wallet, which is in use today.”

Alejandro Rothamel, specialist in crypto assets (Ripio)

• “There is still a long way to go before digital assets can be consolidated in Argentina”.
• “There are banks that are dissatisfied with the principle of reserve.”