Population: 45 million

Wealth in domestic bank deposits: 49 billion USD (December 2023)

Offshore expatriated wealth: 17.1 billion USD

Main offshore banking locations: N/A

Number of individual brokerage accounts: 1,157,000 (2024)

Crypto adoption (% of population): 4.5 million (9.73%)

TLDR

Argentina has a complex system of foreign exchange controls intended to stabilize its currency and economy. However, these stringent controls have prompted some circumvention through alternative channels like cryptocurrency. The regulatory environment for cryptocurrencies is still evolving, with tax obligations established but comprehensive legislation still pending.

The securities market is regulated by the National Securities Commission which oversees listing and disclosure requirements. Foreign companies can access the market by establishing a local presence and meeting regulatory requirements.

Overall, Argentina presents a challenging environment for offshore investment due to foreign exchange controls and economic volatility. However, gradual reforms and advances in fintech regulation point to liberalization over time.

Exchange controls

Argentina imposes strict foreign exchange controls on the purchase and sale of foreign currency, requiring conversion of export earnings and restricting access to dollars for various payments. This system, managed by the central bank, aims to stabilize the frequently volatile peso by ensuring availability of dollars for strategic imports and debt payments.

The foundation of the current foreign exchange regulations was laid in September 2019 with Decree 609/2019, which mandated the conversion of exported goods and services into pesos. The central bank issued new regulations in April 2023 that provided several key amendments.

One change extended the period entities must attest they did not use the blue-chip swap mechanism from 90 to 180 days before and after requiring access to purchase foreign currency. Payment for certain services like legal, accounting, and advertising now have a 60 day waiting period before buying dollars, needing central bank pre-approval.

Financial debts including interest payments to foreign affiliated companies also need pre-approval until end of 2023. These rigid controls have led some Argentines to use stablecoins to preserve savings despite lack of official recognition.

Distribution rules for foreign investment products

The securities market is governed by the Capital Markets Law and the National Securities Commission (CNV). The CNV oversees listing requirements for the Buenos Aires Stock Exchange and disclosure rules.

Foreign companies can request public offerings in Argentina by establishing a local branch and meeting CNV requirements. If conducting continuous business, they are considered to have tax presence.

There are no minimum size or trading requirements for listing companies. Financial statements must follow International Financial Reporting Standards.

Qualified investors

Argentina distinguishes between qualified and non-qualified investors based on definitions set by the CNV. Qualified investors include government entities, banks, mutual funds, insurers, brokerages, and individuals with over $350,000 in investments.

More streamlined suitability rules apply for qualified investors. The CNV aims to identify those with resources to analyze complex investments.

Cryptocurrency regulation

Argentina currently treats cryptocurrency as an unregulated asset class and its use has expanded given restrictions on foreign currency. There is no specific comprehensive legislation, but crypto transactions are subject to capital gains tax since 2017. The popularity of cryptocurrencies has risen as they are seen as a viable everyday payment alternative due to rampant inflation and restraints on accessing foreign currency. Stablecoins in particular have gained traction as a way to mitigate economic volatility.

In December 2022, the government created the Blockchain National Committee, aiming to provide guidelines and implement blockchain technology within public administration. Cryptocurrency regulation so far relates to taxation of financial gains and preventing fraud and Ponzi schemes. The central bank prohibits banks from crypto operations, even on behalf of clients.

A pending reform of the anti-money laundering law would regulate crypto service providers to prevent illicit activity, in preparation for upcoming international assessments. This would require crypto companies to meet standards for user protection, security, efficiency and preventing money laundering.

The private sector is working with government bodies to shape the regulatory framework and provide security and predictability. However, Argentina lacks the comprehensive crypto regulation models of neighbors Brazil and Chile.