ARGENTINA: An Introduction to FinTech Legal

Regulating the Ever-Evolving Fintech Sector

The year 2024 witnessed a period of remarkable transformation within Argentina’s burgeoning fintech sector. The year was marked by a dynamic interplay of forces: progressive regulatory advancements, the emergence of innovative solutions, and a concerted effort to foster an environment conducive to sustainable industry growth. This confluence of factors positioned Argentina as a significant player in the evolving global fintech landscape.

Registration of Virtual Asset Service Providers is now under regulation

The year began with the landmark Law No 27,739, which establishes a regulatory framework for Virtual Asset Service Providers (VASPs). This law, enacted in 2024, defined the scope of activities covered by VASPs, providing a fundamental basis for regulatory compliance.

In addition, the legislation requires registration with the National Securities Commission (CNV), a fundamental step to ensure transparency and accountability in the sector. Importantly, the law includes anti-money laundering and anti-terrorist financing measures overseen by the Financial Intelligence Unit (UIF), bringing Argentina in line with international best practices.

Following the enactment of Law No 27,739, the CNV issued Resolution 994/2024, which outlines specific registration requirements for VASPs. This resolution was designed to provide specific guidance to industry participants while ensuring compliance with the recommendations of the Financial Action Task Force (FATF). Additionally, the UIF regulated the registration and obligations of VASPs with applicable AML regulations.

It is also worth mentioning that last October, the CNV launched a process of Participatory Rulemaking for a new regulatory framework governing VASPs. In March this year, following public consultation through General Resolution No 1025, the CNV approved General Resolution No 1058, which establishes the regulation of VASPs. It aims to ensure transparency, stability and protection of users in the crypto ecosystem, imposing obligations in terms of registration, cybersecurity, custody of assets, prevention of money laundering and risk disclosure. Although the regulatory framework stipulates precise deadlines for incumbent VASPs to conform to the newly promulgated regulations and preserve their registration, it is imperative to acknowledge that the entirety of the regulatory instrument shall enter into force on 31 December 2025.

Deregulation of payment systems: expanding consumer choice

The evolution of payment methods in Argentina continues to gain momentum. A notable development in 2024 was the introduction of QR-code payments for public transportation services. On 28 November 2024, the Argentine Central Bank (BCRA) issued Communication A 8138, outlining measures to regulate and standardise these QR-code payments. This initiative empowers passengers to conveniently pay fares using funds directly from their bank accounts or digital wallets.

The process involves passengers generating a unique QR code within their banking app or digital wallet. This generated code is then scanned by a point-of-sale (POS) device at the transportation point, enabling a seamless and cashless transaction. Initially, the service will primarily support the “consumer-presented” QR-code payment method, where the passenger initiates the payment process.

Argentine Tax Authority incorporates crypto activities

By means of General Resolution 5607/2024, the Argentine Tax Authority (ARCA) amended RG 3537 and incorporated 15 new activity classifications to the Classification of Economic Activities (CLAE), seeking to update the registry and reflect the digital evolution and emerging business models.

Its main objective is to include codes that reflect digital transformation and new economic activities, such as messaging services through digital platforms, e-platform development, crypto-asset management, digital financial services and online audiovisual media advertising. Numerous activities related to crypto-assets – ranging from P2P operations to mining – have been incorporated, providing greater clarity on the framework in which they will be included for tax purposes.

Safe harbour for the offering of securities

In 2024, the CNV approved two safe harbours for the offering of securities: (i) a safe harbour for the offering of securities which do not have sufficient contact with Argentina, and (ii) a safe harbour for private offerings of securities. This provides more certainty as to when registration with the CNV for the offering of securities is required, allowing fintechs to build products involving securities.

Warrants

In July 2024, the government deregulated the market of warrants, equating the treatment of registered and unregistered warrant issuers, allowing electronic trading in the issuer’s or third-party’s platforms using any technology which allows the identification of the owner and of the signatory, including centralised or distributed ledgers.

Tokenisation of Real-World Assets (RWAs): a regulatory sandbox approach

An important development in 2024 was the emergence of a proposed regulatory sandbox for RWA tokenisation, a significant initiative spearheaded by the Argentine Fintech Chamber in collaboration with Crecimiento (ie, growth). This collaborative effort aimed to harness the transformative potential of blockchain technology while mitigating associated risks within the emergent RWA tokenisation market.

The proposed sandbox envisioned a multi-agency approach, involving the collaborative oversight of the BCRA, CNV, UIF, and potentially other relevant regulators like the Superintendency of Insurance of the Nation (Superintendencia de Seguros de la Nación– SSN) (in the case of insurance-related RWAs). This multi-faceted approach aims to achieve several key objectives.

Firstly, it seeks to encourage the development of novel applications for RWA tokenisation, such as fractional ownership of real estate, art, and other assets, thereby facilitating greater access to investment opportunities for a wider range of individuals. Secondly, the sandbox would allow regulators to closely monitor and assess the potential risks and benefits of RWA tokenisation in a controlled setting, gathering valuable data to inform future regulatory decisions. Finally, by fostering a collaborative environment between regulators and industry players, the initiative aims to encourage the development of responsible and sustainable RWA tokenisation practices within the Argentine market, ensuring consumer protection and financial stability.

This proactive approach to navigating the evolving landscape of digital assets in Argentina aimed to unlock the potential of RWA tokenisation while mitigating potential risks, ultimately contributing to the growth of the Argentine fintech sector.

Conclusion

The year 2024 was a period of significant legal and regulatory progress for Argentina’s fintech ecosystem. The enactment of Law No 27,739 provided much-needed clarity and oversight for this dynamic market, whilst subsequent regulatory actions by the CNV demonstrate a commitment to the sector. Additionally, the deregulation of warrants and payment systems, exemplified by the introduction of QR-code payments for public transportation, underscores a broader shift towards a more inclusive and efficient payment landscape. The regulation of VASPs provides greater clarity for businesses operating in this space, promoting transparency and facilitating tax compliance.

These developments collectively demonstrate a dynamic and evolving regulatory landscape in Argentina’s fintech sector. By fostering a favourable and lively regulatory environment, Argentina can harness the transformative potential of financial technology to drive economic growth.