Argentina bans Bitcoin purchase with credit or debit cards

Within a few days of imposing restrictions on buying the U.S. dollar, the Central Bank of Argentina has now imposed bans to purchase Bitcoin and cryptocurrencies with credit cards or debit cards.

The new measures state that financial institutions and other local card issuers must have prior approval of the Central Bank to access the exchange market and make payments abroad through the use of credit, debit or prepaid cards starting Nov 1, 2019.

The rule applies to operations related to gambling and betting, foreign exchange, acquisition of cryptocurrency assets and the transfer of funds to investment managers located abroad.

Preserving exchange stability against the degree of uncertainty:

The fear of Argentina’s currency Peso nearing the edge of hyperinflation and sharp devaluation, citizens have been hedging Peso with a stable foreign currency, mostly U.S. Dollar. With Oct 27 restrictions, citizens can buy only $200 per month via bank payments and $100 per month if purchased with cash.

Argentina’s economy inflation rate in Sept 2019 was 53.5%. With continued restrictions from the Argentinia central bank, cryptocurrencies have become a growing popular choice among Argentinians. Used mainly for hedging against the deterioration of local fiat currency. In August 2019, Bitcoin was trading at a premium of as much as 4-5% in local crypto exchanges.

The new rules imposed by the Argentina Central Bank intends to limit the purchase of Bitcoin and using crypto exchanges by citizens to get access to foreign currencies. The Central Bank sees these measures critical to maintaining Argentina’s currency – peso stability and protecting the reserves against the degree of uncertainty.

Now with no support for credit or debit card on-ramp service, Argentinians are limited to purchase Bitcoin from ATMs and bank transactions which are again subject to clearance. Currently, as per Coinatmradar, Argentina has a total of 11 Bitcoin ATMs.