Argentina brings a tax hammer down on crypto transactions and exchanges in a rule update

• Argentina updated its "check tax" rules on Wednesday to clarify that crypto exchanges are not exempt.
• That means crypto sales and purchases are subject to the tax of up to 0.6% on banking debits and credits.

Argentina is now taxing cryptocurrency sales and purchases, after its government updated existing rules to clarify that crypto exchanges are not exempt from collection.

A "check tax" of up to 0.6% on credits and debits is placed on banking transactions — such as cash deposits, wire transfers and checks themselves — in Argentina. But transactions involving digital currencies were not considered to fall under the rules.

That changed Wednesday, when the government spelled out how the tax collection measure affects payment service providers.

"The exemptions provided for in this decree and in other regulations of a similar nature will not be applicable in those cases in which the movements of funds are linked to the purchase, sale, exchange, intermediation and/or any other operation on crypto assets, cryptocurrencies, digital currencies, or similar instruments, in the terms defined by the applicable regulations," it said in a decree updating the measure.

The clarification, which came into force immediately, means crypto exchanges and similar businesses with Argentine bank accounts are now expected to comply with the tax rules. The measure is likely to hit local brokers harder than those based abroad.

Governments around the world are looking at the crypto industry as a potential source of tax income, as the adoption and popularity of digital assets surges.

In the US, an infrastructure bill signed into law on Monday brought in new rules for crypto brokers, which now have to report transactions over $10,000 to the tax authorities. Taxes on digital assets could raise as much as $28 billion in funds, The New York Times reported.

In Argentina, the government's tax decision is likely to drive up the price of cryptocurrencies for those buying in pesos, a senior executive at an Argentine exchange told CoinDesk.

It also could open the door for more action on digital assets from regulators, as digital cash booms in the country. In August, the president of Argentina's central bank, Miguel Pesce, raised risks around price volatility and consumer protections as factors officials were closely monitoring.

"We are concerned about the development of cryptocurrencies," he said at a virtual meeting, according to a report in local news outlet Clarin.