Crypto exchange Binance expands in Argentina amid inflation and regulatory challenges

Binance, one of the world’s largest cryptocurrency exchanges, has announced that it is expanding its services in Argentina, a country that has been struggling with high inflation and strict capital controls. The exchange said that it will allow users to buy and sell digital currencies directly with Argentine pesos through a local partner, making it easier and cheaper for them to access the crypto market.

Binance had previously operated in Argentina only as an intermediary platform that matched crypto buyers and sellers, requiring them to use third-party services to convert their pesos into other currencies or cryptocurrencies. Now, users can transfer pesos into a Binance account and see their balance reflected in local currency, which can then be used to purchase any of the hundreds of cryptocurrencies available on the platform.

“This launch has to do with the public demand that exists here,” said Maximiliano Hinz, director for Binance in the Southern Cone, in a written statement. “Argentina is a key market for us and we are committed to providing the best service and products to our users.”

The expansion comes at a time when Argentina is facing economic and social challenges that have made cryptocurrencies more appealing for many people. The country has an annual inflation rate of over 100%, which erodes the purchasing power of the peso and makes it hard for people to save or invest. The government also imposes strict capital controls that limit the amount of foreign currency that people can buy or sell, creating a black market with high premiums.

Cryptocurrencies offer an alternative way for Argentines to store value, hedge against inflation, and access global markets without intermediaries or restrictions. According to the Chainalysis index, Argentina was among the top 15 countries in the world for crypto adoption last year, with a high level of peer-to-peer trading and grassroots education.

However, Binance’s expansion also comes with some regulatory risks, as the exchange is facing scrutiny and lawsuits from authorities in several countries, including the U.S., where it is accused of operating an illegal exchange and a sham compliance program. Binance’s CEO Changpeng Zhao has denied the allegations and said he is willing to cooperate with regulators.

Argentina does not have a specific regulation for crypto exchanges, but the central bank has repeatedly warned about the risks of cryptocurrencies and the markets regulator CNV is backing a bill to create a registry of providers offering virtual assets. Binance said it is working closely with local regulators and partners to comply with local laws and regulations.

“Argentine users know the crypto world,” Hinz said. “We want to offer them more options and possibilities to participate in this new economy.”

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