New Argentina Crypto Law: Declare Assets to Avoid Hefty Taxes

Key Takeaways

• Argentina aims to attract new foreign investments in crypto.
• Milei’s government has set new rules for the crypto industry. 
• The new set of rules looks to enhance financial transparency. 

The Argentine government, led by President Javier Milei, is tightening its grip on cryptocurrency by introducing a new law requiring citizens to declare their digital asset holdings.

The published law  is part of Milei’s “Law of Foundations and Initial Measures for Argentinian Liberty ,” it aims to enhance financial transparency and curb tax evasion by imposing substantial tax penalties for non-declaration of crypto earnings.

Crypto Holders Face New Rules: Declare or Pay Up

Previously, crypto holders in Argentina enjoyed a fixed tax rate for declared assets for holdings below $100,000 and an up to 15% tax for holdings above $100,000. 

The new law now removes the previous tax benefits and mandates the declaration of crypto holdings to avoid penalties. Additionally, asset holders must keep their cryptocurrencies within exchanges registered with the National Securities Commission (CNV) in Argentina. 

As per the new legislation, assets declared before March 31, 2025, will be taxed only on capital gains, with no tax on the holdings. International cryptocurrency transfers will face a 5-15% tax rate.

Additionally, the tax regulations specify that digital assets should be valued at their higher market value on December 31, 2023, or their acquisition value. 

This could be challenging for stablecoin holders, as their higher local market value often exceeds the official exchange rate. The demand for USDT (Tether) has led its market value in Argentina to frequently surpass official exchange rates, sometimes by up to 40%, amid rampant inflation of the local currency, the Argentinian peso.  

Celebration and Criticism in the Crypto Community

President Milei is notorious for his pro-crypto outlook, which has made his propositions popular among crypto enthusiasts.

However, the law has sparked debate and dissatisfaction among the crypto community. While some people celebrate it as part of a “crypto revolution,” others criticize it and see it as a wake-up call for potentially contradicting Milei’s initial pro-crypto stance. 

Clearer Regulations to with Ambitious Goals

President Milei’s new law aims to attract foreign investments by providing more explicit regulations for cryptocurrency holdings. 

According to the Chainalysis Report 2023,  Argentina is a leading country in adopting cryptocurrency. The new law could reflect its high level of cryptocurrency adoption to safeguard Argentinians against the devaluation of their local currency. Still, it also might put it at the lead in cryptocurrency regulation.