Banks Prepare for a Regulated Crypto Market
Argentina is moving toward a financial shift, as the Banco Central de la República Argentina has begun reviewing a plan to let private banks offer crypto trading and custody services. The review would end a long ban that kept banks away from digital assets. The proposal emerged as regulators reacted to rising public crypto use and President Javier Milei’s market-friendly stance.
This review reverses years of strict limits that blocked banks from handling crypto in any form. The earlier ban aimed to reduce financial risk and restrict unregulated activity. However, regulators now want to manage this sector through supervised channels instead of leaving it outside oversight.
This also follows increased pressure from users who already rely on digital assets. The change comes from daily economic realities. Argentines use Bitcoin and stablecoins to protect income from inflation and currency controls.
Many workers receive part of their pay in digital assets. Others save or spend in them to avoid peso volatility. This usage created a parallel market that regulators could not track. The new plan aims to move this activity onto visible, regulated rails.
By bringing the sector under its purview, the central bank expects stronger protections. Banks must apply full Know Your Customer and Anti-Money Laundering rules. They must also meet reporting standards that help the government track transactions. This step would reduce off-grid flows and increase market transparency. It also connects naturally to broader fiscal oversight.
New Rules Reshape Competition With Exchanges
However, the change also impacts the companies that currently dominate the market. Local exchanges and global platforms hold most crypto activity today. They offer trading, custody, and peer-to-peer options, which are widely used during inflation spikes. Once banks enter these services, they could face fresh competition and fee pressure. Banks hold millions of accounts and already manage capital at scale.
They also run established risk systems and operate under strict supervision. Their entry may push fees lower and attract users who have avoided exchanges due to trust concerns. However, banks must make major operational upgrades to support this new business line.
They must build or rent custody platforms, run onchain risk teams, and keep client assets segregated from bank funds. Regulators will require strict trading processes. Banks must route orders through approved venues. They must also warn users that crypto positions do not receive deposit insurance.
These warnings must explain market risk, technology risk, and the possibility of freezes or unwinds if ordered by regulators or courts. Only a limited group of assets will qualify at first. These include Bitcoin, widely used dollar-pegged stablecoins, and tokenized instruments that meet liquidity and audit requirements.
Supervisors Focus on a More Visible Crypto Economy
This review also gives policymakers new tools. For years, capital controls and inflation pushed users toward offshore platforms and informal channels. Regulators lacked visibility into flows that shaped local dollar demand.
Bringing this activity into banks offers clearer data on market behavior. It also helps track dollar-linked pressure on the peso. Banks gain new revenue opportunities but also carry new risks.
They must explain outages, hacks, or token failures to customers who expect bank-level reliability. They must also maintain liquidity and capital levels that match volatility in digital assets.
These demands reshape internal operations and create new reporting lines for supervisors. If implemented fully, the review would allow corporate treasurers to use regulated rails for hedging or tokenized instruments.
Retail users can trade through familiar interfaces instead of peer-to-peer networks. This alignment increases the central bank’s visibility and reduces reliance on unregulated markets.
Meanwhile, Argentina’s review is a significant shift toward regulated crypto activity inside banks. It moves long-standing public use into supervised channels with clearer protections. The plan reshapes competition, raises operational demands on banks, and offers regulators new visibility into digital flows.