Non-governmental organization Bitcoin Argentina presented a draft law proposing to regulate the cryptocurrency market in a way that preserves decentralization and strengthens public trust.
The proposed legal framework was presented by Bitcoin Argentina President Ricardo Mihura on November 10 at LABITCONF 2023 in the Argentine capital Buenos Aires. Bitcoin Argentina previously rejected the idea that the industry needed to be regulated. However, Bitcoin proponents now argue that it is necessary to not only preserve the blockchain, but also to hold bad actors accountable to the fullest extent of the law.
“We have always rejected attempts to regulate the crypto economy, but this time we have set ourselves the goal of providing a positive response, with only two goals: preserving decentralization and protecting savings and public trust. ” Mihura added:
“We cannot close our eyes to the number of dishonest actors and projects circulating under the blockchain brand.”
Ricardo Mihura speaks at the cryptocurrency regulation panel at LABITCONF 2023. Source: LABITCONF.
The first article of the legal framework focuses on dividing cryptocurrency platforms and service providers into three categories to establish ownership rights: decentralized, locally centralized or willing to engage in dialogue with authorities, and globally centralized.
Platforms falling under one of the two centralized categories would be able to operate freely, but their customers would receive “the broadest possible legal protection,” guaranteeing the right to seek compensation in the event of the company’s bankruptcy.
It is clear that the Argentine judiciary will not intervene in failures of decentralized platforms.
Courts will decide whether or not a cryptocurrency platform is sufficiently decentralized when adjudicating claims from allegedly wronged customers.
Related: Argentina’s central bank bans cryptocurrencies from payment apps
Mihura emphasized that imposing a complete ban on cryptocurrencies – which some governments have tried to do – simply wouldn’t work given the global nature of blockchain:
“Even the United States cannot effectively ban the operation of the illegal crypto economy […] Argentina has no option to ban its citizens from operating in global environments [so] we believe that there is no point in proposing a ban from above and we choose to propose the best that the law can offer to its citizens.”
“This includes those directly responsible and anyone who benefits from the marketing chain of fraud, down to the ultimate victim,” Mihura added.
Argentina’s Blockchain bill comes a week before Argentina’s second presidential election between Sergio Massa, the country’s economy minister, and Javier Milei, an economist-turned-politician who wants to abolish Argentina’s central bank and adopt the US dollar enter.
Argentina is currently facing an inflation crisis. Over the past twelve months, the country has recorded the fourth highest annual inflation rate in the world at 121.7%.
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