The Central Bank of the Republic of Argentina and the Central Bank of Uganda have told their commercial banks and financial institutions that they cannot deal in cryptocurrencies, while reminding their citizens that the use of cryptoassets is not legal within their territories.
For Argentina and Uganda, the adoption of cryptocurrencies can entail significant risks, which is why they have discouraged the offering of operations and services with these digital assets from the banking entities of their financial systems.
Argentina, through its Central Bank, It has forbidden commercial banks and other financial institutions to carry out or facilitate transactions with cryptocurrencies, remembering that these are not regulated or authorized by the Central Bank.
Meanwhile, from Uganda, the director of payments at the country's central bank, Andrew Kawere, has recently pointed out that no company in the country has a license to legally operate with cryptocurrencies, which is why financial institutions are also discouraged from continuing to offer services in crypto assets.
Both central banks believe that the measure will help mitigate the potential risks associated with cryptocurrencies, guaranteeing the security and protection of their investors and users.
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The Central Bank of Argentina against cryptocurrencies
The warnings from the Central Bank of the Republic of Argentina (BCRA) are not new. In mid-2021, the entity had warned about the risks that cryptocurrencies can entail for their users. At that time, the entity highlighted market volatility and cyberattack risks as the greatest challenges of the alternative financial ecosystem offered by cryptoassets.
Now, Argentina's top financial authority stresses that cryptocurrency operations are not established in the country, which could lead to a departure from general regulations. Therefore, it indicated that its financial entities "They may not carry out or facilitate their clients' carrying out of operations with digital assets... that are not regulated by (the) national authority and authorized by the Central Bank of the Argentine Republic (BCRA)".
The BCRA's warnings come after Banco Galicia, Argentina's largest private bank, and Brubank, a mobile bank based in the country, opened trading of cryptocurrencies such as Bitcoin from their platforms.
As Bit2Me News reported this week, both Argentine banking entities have become the first to sell cryptocurrencies, offering their clients direct access to these digital assets.
Uganda also discourages its entities from continuing to provide services in cryptocurrencies
According to local media, Kawere from Uganda said that commercial banks and financial institutions should stop services that facilitate transactions with crypto assets.
The director of payments at the Central Bank of Uganda believes that the conversion of cryptocurrencies to fiat money and vice versa should not happen without the involvement and oversight of payment service providers and payment system operators, he said, according to Bloomberg Crypto.
In addition to this, Kawere also recalled that the central bank "has not authorized any institution to sell cryptocurrencies or facilitate the exchange of cryptocurrencies".
The central bank's warnings are directed at payment service providers and intermediaries, as well as commercial banks, financial institutions and fintech companies.
However, while the East African nation is closing its doors to this growing industry, the Central African Republic, located in Central Africa, has become the first country on the continent to regulate Bitcoin and cryptocurrencies, following in the footsteps of El Salvador to make this digital asset its legal tender.
Continue reading: Central African Republic will be the first African country to accept Bitcoin as legal tender
