Financial Crime World

Fintech Regulations in Argentina: Challenges and Opportunities

Introduction

Argentina has seen a significant boom in Fintech investment, with companies receiving USD 900 million in investments and projecting to reach 40 million users by 2022. However, the industry still faces challenges related to regulation, competition, and cybersecurity risks.

Regulatory Environment

Payment Service Providers (PSPOCPs)

  • PSPOCPs have been regulated by the Central Bank since 2018, requiring them to comply with specific rules regarding the holding of customer funds.
  • A recent measure by the Central Bank obliges banks to hold 100% of customers’ funds deposited in virtual accounts, affecting PSPOCPs’ profitability and ability to offer services.

Unidad de Información Financiera (UIF)

  • The UIF has been involved in regulating Fintech activities, including crowdfunding platforms.
  • Crowdfunding platforms are considered reporting entities with the UIF.

Comisión Nacional de Valores (CNV)

  • The CNV regulates the offering of securities and has issued resolutions regarding crowdfunding platforms as reporting entities with the UIF.

Cryptocurrencies

  • Cryptocurrencies are not regulated by the Central Bank but are subject to income tax according to the Argentine Income Tax Law.
  • Digital currencies are considered assets for tax purposes, and their profits are taxed accordingly.

Growth of Fintech in Argentina

  • Fintech companies in Argentina are expected to grow significantly in 2022, driven by investments from abroad and a growing demand for digital financial services.
  • However, the industry still faces challenges related to regulation, competition, and cybersecurity risks.

Conclusion

Fintech in Argentina is on an upward trend but needs further development of its regulatory framework to support its growth. It is expected that the government will continue to work on improving the regulatory environment to foster innovation in the sector while ensuring financial stability and security for customers.

Key Takeaways

  • Payment Service Providers (PSPOCPs) are regulated by the Central Bank.
  • The UIF has also been involved in regulating Fintech activities, including crowdfunding platforms.
  • Cryptocurrencies are not regulated by the Central Bank but are subject to income tax according to the Argentine Income Tax Law.
  • Digital currencies are considered assets for tax purposes, and their profits are taxed accordingly.
  • Fintech companies in Argentina are expected to grow significantly in 2022 driven by investments from abroad and a growing demand for digital financial services.