The group, “Bitcoin Argentina,” previously rejected the idea that regulation was needed in the cryptocurrency industry.
Non-government organization Bitcoin Argentina presented a draft bill proposing to regulate the cryptocurrency market in a way that preserves decentralization and strengthens public trust.
The proposed legal framework was pitched by Bitcoin Argentina’s president Ricardo Mihura at LABITCONF 2023 in Argentina’s capital, Buenos Aires on Nov. 10. Bitcoin Argentina previously dismissed the idea that the industry needed to be regulated. However, the Bitcoin advocates now argue it is necessary to not only preserve blockchain but also 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 set ourselves the goal of giving a positive response, with only two purposes: preserving decentralization and protecting savings and public trust.” Mihura added:
“We cannot close our eyes to the number of dishonest actors and projects that circulate with the blockchain brand.”
The first article of the legal framework focuses on separating cryptocurrency platforms and service providers into three categories to ascertain property rights — decentralized, local centralized or willing to dialogue with authorities, and global centralized.
Platforms that fall under one of the two centralized categories would be allowed to operate freely, but its customers would be granted “the broadest possible judicial protection,” guaranteeing the right to claim damages in the event of a company downfall.
It is understood that Argentina’s judiciary will not intervene on failures from decentralized platforms.
Courts will decide whether or not a cryptocurrency platform is sufficiently decentralized when resolving claims put forward by allegedly injured customers.
Mihura stressed that imposing an outright ban on cryptocurrencies — which some governments have tried to do — simply wouldn’t work given the global nature of blockchain:
“Not even the United States can effectively prohibit the operation of the unlicensed cryptoeconomy […] Argentina has no possibility of prohibiting its residents from operating in global environments [so] we believe that it does not make sense to propose a top-down ban and we choose to propose the best that the law can offer to its citizens.”
“This includes those directly responsible and all those who profit in the marketing chain of a fraud, until the final victim,” Mihura added.
Blockchain Argentina’s proposed bill comes one week ahead of Argentina’s presidential run-off 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 United States dollar.
Argentina is currently battling an inflation crisis. Over the last 12 months, the country has recorded the fourth largest annual inflation rate in the world at 121.7%.