Fri. Jun 14th, 2024
Controversy surrounds the BCRA’s repeal of a rule

The Central Bank board has once again intervened in the dispute between banks and virtual wallets, repealing a 2023 rule that required Payment Service Providers (PSPs) to pass on the returns generated by the balances to their clients. This move was made through Communication A 8038, which revoked a standard from September of the previous year, Communication A 7825, which stated that virtual wallets must pay their clients for the money they leave deposited in the accounts, even when the user does not invest in any instrument. This allowed those with demand balances to receive a profit without any risk.

The Central Bank explained that repealing the restrictive Communication A 7825 aimed at promoting financial inclusion by strengthening smaller digital wallets. The new regulations now allow PSPs to transfer the remuneration of demand account balances to their clients. The balances must still be entirely deposited in financial institutions with 100% reserve requirements, although a portion can be remunerated.

While the Central Bank’s decision was intended to benefit smaller digital wallets and promote financial inclusion, it faced criticism from the banking sector. Some banks expressed concerns that this decision would allow certain financial institutions to circumvent regulations while still benefiting from returns on deposits.

In recent years, the Central Bank has implemented various regulations regarding the management of funds in virtual wallets, including requiring all funds to be deposited with the bank and restricting the allocation of funds to particular investments. While some members of the Argentine Fintech Chamber praised this decision as an important step towards promoting financial inclusion, others raised concerns about potential impacts on the financial industry as a whole.

Overall, it appears that ongoing efforts are being made by regulators like those at Argentina’s Central Bank to balance competing priorities related to digital payments systems – namely promoting financial inclusion while maintaining regulatory oversight over these systems.

By Aiden Nguyen

As a content writer at newscholarly.com, I delve into the realms of storytelling with the power of words. With a knack for research and a passion for crafting compelling narratives, I strive to bring forth engaging and informative articles for our readers. From decoding complex concepts to unraveling current events, I aim to captivate and educate through the art of writing. Join me on this journey as we explore the ever-evolving landscape of news and knowledge together.

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