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Bitcoin Argentina, a civil society organization, has shared a noteworthy proposal with the public. According to this proposal, a draft law is presented by the team to regulate the cryptocurrency market in a way that preserves decentralization and strengthens public trust. The proposed legal framework was presented to participants at the LABITCONF 2023 event in Buenos Aires, the capital of Argentina, on November 10th, by Ricardo Mihura, the president of Bitcoin Argentina.
Key Points in the Draft Law
Bitcoin Argentina had previously rejected the idea of legal regulations concerning the crypto sector. However, Bitcoin advocates have begun to argue that it is necessary not only to protect the blockchain industry but also to hold bad actors in the sector accountable within the framework of the law:
“We have always rejected attempts to regulate the crypto economy, but this time we set ourselves the goal of responding positively for only two purposes: to preserve decentralization and to protect savings and public trust. We cannot turn a blind eye to the number of dishonest actors and projects circulating under the blockchain brand.”
The first article of the proposed regulations focuses on categorizing crypto platforms and service providers into three categories to determine their property rights: decentralized, locally centralized, or centralized platforms willing to engage in dialogue with authorities.
Platforms falling into one of the centralized categories will be allowed to operate freely in the market, but they will be provided with the broadest legal protection for their customers. This will ensure that investors have the right to claim compensation in case of a company’s bankruptcy.
Draft Law Preceding Presidential Elections
This draft law suggests that the Argentine judiciary will not intervene in the failures that may occur in decentralized platforms. The court process will focus on the claims made by investors who allege to have suffered damages and will determine whether a crypto platform is decentralized enough:
“Even the United States cannot effectively ban the functioning of the unlicensed crypto economy. Argentina has no possibility of banning its residents from operating in global environments, so we believe that proposing a top-down ban is not reasonable, and we choose to propose the best thing the law can offer to its citizens.”
The proposed law, suggested by Blockchain Argentina, came one week before the presidential election between Sergio Massa, Argentina’s economy minister, and Javier Milei, an economist and politician who wants to strip the central bank of Argentina of its powers and adopt the US dollar as the fiat currency.
Argentina is currently struggling with an inflation crisis. The country has recorded the fourth highest annual inflation rate in the world with 121.7% in the past 12 months.
