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Buenos Aires Residents Can Now Pay Their Taxes Using Cryptos

·3 min read

Key Insights:

  • Buenos Aires will allow residents to pay taxes in cryptos such as Bitcoin.

  • The municipality does not plan to hold crypto in its accounts.

  • The city mayor rolled out plans, including the use of blockchain to enable users control their personal data.

Several weeks after Brazil’s city of Rio de Janeiro announced that it would accept cryptos for payment of certain taxes, another major South American city has embraced cryptocurrencies for tax payments.

Buenos Aires, the capital city of Argentina, announced Tuesday that it would start accepting tax payments in Bitcoin from residents. The move was announced by the city mayor Horacio Rodriguez Larreta, during a virtual presentation, as a part of the city’s latest digitization measures.

The Mayor announced twelve futuristic initiatives, dubbed ‘Buenos Aires+’ on improving public services through technological reforms. Per the announcement, the government has had agreements with virtual crypto wallets to implement the scheme.

“Together with the leading companies, we are working so that those who wish can pay their taxes in cryptocurrencies.”

But unlike the Brazilian city of Rio, which in January said that it would keep Bitcoin for the city’s treasury reserves, Buenos Aires clearly stated that it does not intend to hold cryptos in its accounts.

Instead, the Mayor noted that payments made in cryptos would be converted to the Argentine pesos, the local fiat money, before being deposited in the government treasury. Mayor Rodríguez Larreta said in his statement,

“The city is not going to have crypto in public accounts, but through an agreement with virtual wallets, we are going to add one more payment option to the ones we already have, with the idea of making things easier.”

Local crypto service providers SatoshiTango, Buenbit, Ripio and Belo, and the Mexican crypto exchange Bitso, have been approved for this new policy.

The service is likely to be implemented in the “coming months,” Diego Fernández, the city’s innovation and digital transformation secretary, told CoinDesk.

Blockchain for Digital Identification

Furthermore, the city mayor also announced an initiative that uses blockchain technology for protecting and validating personal data. This was first introduced in March through a white paper detailing a blockchain-based digital identification platform.

The digital ID system would allow users to control their own personal data.

Fernández said that it would take six months to develop the blockchain platform. He added,

“People will have governance over their information. We are developing a platform so that they can know who is requesting their data and what they are looking at. Each of these orders will be made in an open blockchain-based system.”

Crypto Adoption in Argentina

The usage of cryptocurrencies has grown exponentially in frontiers such as Argentina, where the national currency has been highly unstable, making it difficult for people to buy and invest.

According to Jerónimo Ferrer, a crypto enthusiast in Buenos Aires, crypto for many is primarily a form of investment for profits. However, for many Argentines, crypto is a part of their “basic needs.”

Talking to a recent BBC report, he said,

“I trust more mathematics and software than I trust politicians. I think that Bitcoin for Argentinians should be a no-brainer.”

A recent Chainslysis report stated that Argentines earned $1.86 billion in cryptocurrency last year alone, with Bitcoin and Ethereum dominant.

Additionally, the country has been facing a lot of restrictions on transactions in foreign currencies. Ferrer noted,

“When you have restrictions, you need tools for freedom.”

The Central Bank of Argentina is also eyeing the development of cryptos in the nation with “concern,” according to the bank’s president, Miguel Pesce. The bank has issued warning to the public about crypto scams targeting user wallets.

This article was originally posted on FX Empire