The decision made by President Javier Milei to permit contracts to be carried out using any currency may result in the approval of business agreements involving digital cryptocurrencies.
Officials believe that Argentines currently possess around $100 billion in undisclosed digital currencies, a number which aligns with estimations provided by a growing number of consulting firms that specialize in crypto-assets.
President Milei’s emergency DNU decree has given approval for contracts to be conducted in any form of currency. This provision not only permits transactions to be made in US dollars but also paves the path for agreements to be made using cryptocurrencies.
However, in order to execute these transactions, the digital assets need to be officially declared to the AFIP tax agency beforehand. This presents a significant issue as the majority of crypto-assets in Argentina are not documented or registered with the authorities.
A large number of professionals who work overseas, particularly in programming and IT, find themselves in a uncertain situation. Experts in public opinion research have noted that many of these professionals have shown support for Milei in the election.
Numerous professionals are receiving payments through platforms that do not report the money to AFIP, the tax authority in Argentina.
These payments are made through accounts opened with companies like Payoneer Global Inc, which is a US-based financial services company that provides online money transfer and digital payment services.
Unfortunately, Payoneer is currently making negative news as there have been reports of extensive fraud by alleged hackers targeting many of its Argentine clients and clients in other countries.
To utilize cryptocurrencies, individuals are required to disclose them, declare the rates at which they were obtained and the profit acquired, and fulfill the necessary obligations regarding personal assets and income tax.
Milei’s administration anticipates that this extensive regularization of previously unreported wealth will result in significant tax revenue.
Pablo Reyes, the Chief Executive Officer of SaldoAr, a cryptocurrency wallet, issued a cautionary statement about the need for individuals who want to reap the advantages of cryptocurrencies to take on additional responsibility and have a clear understanding of a sector that lacks formal structure.
Reyes agrees with the Argentine government and believes that individuals possess over $100 billion worth of unreported cryptocurrencies.
According to Foreign Minister Diana Mondino, Argentines now have the ability to engage in cryptocurrency contracts. Manuel Beaudroit, the CEO of the app Belo, states that allowing contracts in different currencies promotes more confidence, adaptability, and inclusiveness for businesses and employees.
The government’s action has been interpreted as a significant support for digital assets. However, it is important to consider that prior to using cryptocurrencies for salary payments or services, it is necessary to provide valid reasons for the origin of the funds to the authorities.
Felix Rolando, a tax expert and partner at Andersen consultancy firm, cautioned that cryptocurrencies are considered as assets in the economy and are subject to taxation according to the laws.
Income obtained through cryptocurrencies falls under the second category of income tax regulations. Moreover, Rolando mentioned that the AFIP has issued an opinion in 2022, stating that cryptocurrencies should be treated as financial instruments within personal assets.
Therefore, individuals are required to declare their cryptocurrency holdings.
Another point that needs to be considered is that regulations surrounding the laundering of international money now include cryptocurrencies. This means that platforms and exchanges dealing with cryptocurrencies may be required by different national, continental, and global organizations to meet specific standards in order to prevent crime.
These rules mandate the collection of data about individuals who send and receive cryptocurrency transactions, as well as those who possess cryptocurrency wallets or purses.
Milei consistently emphasized during the campaign trail, and it has been proven by the financial system over many years, that Argentines prefer to save and consider any currency other than the peso.
This preference has developed due to the historical trend of inflation eroding their savings and, in some instances, wiping out their entire life savings.
In this particular scenario, there has been a significant rise in a certain occurrence in Argentina in recent years. Argentina now ranks among the top 10 countries globally in terms of both fascination and ownership of cryptocurrencies.
Additionally, it is the third country with the highest amount of dollars per person, following the United States and Russia. These facts have been confirmed by reputable international organizations like the International Monetary Fund.
