Favorable legislation in Argentina

[IMPACT]

Argentina is a country where centralized monetary policies show their worst consequences, and where traditional currencies are at their weakest. We’ve had and inflation rate of 51% in 2021 and most Argentinians do not consider their national currency (peso argentino – ARS) as a store of value. USD is the currency used in all major transactions, and the Argentinian peso is reserved for day-to-day expenses.

We, as a people, profoundly distrust our national currency because its permanent depreciation, which is linked to a long-term erratic centralized policy that involves permanent emission to cover government deficit.

In spite of that very sad state of affairs, Argentina has a promising landscape for digital innovation, with over ten Unicorn Startups, such as MELI, Globant, Ualá, Auth0, etc. Many of these companies are listed in the US stock market.

This phenomenon also forced Argentinians to lead the region in crypto adoption. We are 13th in Finders list of countries with most crypto holders and traders, to the point of being called a Crypto Nation.

It is an ideal scenario for a progressive and innovative change in crypto legislation. As stated before, we work as draftsmen in the National Congress, and our goal is to create an educational center (Centro de Políticas Digitales or "Center for Digital Policies", from now on CPD) with other political advisors and NGOs (such as "Democracia en Red" or Net Democracy) to educate legislators in the benefits of the blockchain revolution and the opportunities that friendly crypto legislation can provide for our people.

This center will also promote concrete bills to define the necessary basis for this change in policy. 

Sources:

https://www.baenegocios.com/negocios/Empresas-unicornio-cuales-son-las-11-firmas-argentinas-que-revolucionan-el-mercado-internacional-20220126-0121.html

https://www.iproup.com/economia-digital/29068-criptomonedas-argentina-el-pais-con-mayor-adopcion-de-la-region

https://www.baenegocios.com/economia/Inflacion-de-febrero-2022-en-Argentina-fue-una-de-las-mas-altas-del-mundo-20220315-0040.html

Our center (CPD) benefits from pre-existing relations with congressmen and women, politics, political advisors, NGOs and other public figures.

We’ve worked for over 8 years in the Argentinian National Congress and have intervened in the drafting of several laws, such as the 27.363, 27.372, 27.452 and 27.552 national laws. This includes the historical 2018 abortion law discussion.

In the digital arena, we’ve drafted -in coordination with the Fundación Activismo Feminista Digital (Feminist Digital Activism Foundation)- a bill regarding digital violence that was passed by the Argentinian Chamber of Deputies.

This network allows us to reach and involve several law-makers in serious discussions about the future of crypto regulation in Argentina through conferences and workshops. It is a concrete approach to legislators, not an academic or theoretical dissertation. That helps us address the challenge in accordance with its KPIs:

1)   We could favor all Argentinian jurisdictions with this center for education, since it will have a national reach (National Congress).

2)   We'll promote bills with a minimalistic approach, in contrast with El Salvador’s regulation that –in our opinion- is no viable in a country such as Argentina. This is a first step, that can lead to major adoption in a more gradual and responsible way. The aforementioned minimalist approach in parliamentary law is the PhD project of one of our members.

3)   Our three main lawyers are specialized in parliamentary procedure, and cyber, commercial and constitutional law. We have links to NGOs such as "Democracia en Red" (a civil organization made up of activists, programmers and social scientists who seek to open public institutions and decision-making processe) and our team contains technical analysts and computational scientists.

"Democracia en red" (Net Democracy) website: https://democraciaenred.org/

There is a general challenge that all proposals that involve promotion and adoption of crypto-currency will have to face: the structural tendency to statu quo in legal systems. There is no serious proposal that can guarantee the passing of any kind of bill. That’s not how democracy works.

There are additional challenges in developing countries, like weak institutions and a poor attachment to the rule of law. In Argentina, we have specific problems such as the recent memorandum with the IMF that involves a clause to “discourage crypto”. But there is no clear regulation that stops any form of adoption.

The Argentine legal system doesn’t have a specific regulatory body or a law regulating crypto-assets. However, certain asystematic regulations have been established in the commercial activity (CNV, BCRA –Central Bank-, AFIP), in the form of a timid attempt to regulate cryptocurrency.

On 04/12/2017, the National Value Commission (CNV) issued a statement alerting investors about the potential dangers of initial coin offerings (ICO) of virtual currencies or tokens. In that statement, the CNV concludes that "only an expert investor should invest in ICOs, who is able to analyze the project financed by the ICO and is prepared to lose, eventually, all his investment".

The Central Bank of Argentina (BCRA) in May 2014 issued a statement postulating that virtual currencies "are not issued by this Central Bank or by other international monetary authorities, therefore, they are not legal tender and do not have any backing". This statement was not accompanied by a new official definition of the term virtual currency.

Subsequently, the Central Bank has issued some regulations that reticently mention the terms virtual currencies and cryptoassets. For example, its Communication "A "6823 of 10/31/2019 prevents the use of credit cards (issued by local entities) for the "acquisition of cryptoassets in their different modalities" in foreign exchanges. With this rule, the BCRA sought to reduce the outflow of dollars from its reserves; it was only an exchange measure that also prevents the use of credit cards for other consumption abroad (such as gambling), but it was not a prohibition of transactions with virtual currencies.

Finally, on 20/5/21, the BCRA and the CNV issued (jointly) a new alert on the risks and challenges that crypto-assets present for their users, investors and the financial system as a whole, recommending a prudent attitude in order to mitigate an eventual source of vulnerability for them.

The CNV and the BCRA, as regulators of the financial activity, have published communications and recommendations which are clearly insufficient. The opposite should be the case: companies and investors need legal certainty in order to operate with tranquility, assuming the risks inherent to an activity that, like others, contains a speculative content. And this legal certainty is not achieved simply by alerting about possible risks related to operations, but by means of a coherent, systematic and up-to-date regulatory framework.

As we’ve seen, the regulatory institutions in our country tend to issue general and vague warnings, but fail to provide a specific legal framework for crypto. These warnings have had little to no effect in the general population. In fact, Argentina has a blossoming fintech environment that provides common citizens an easy and intuitive way to purchase and trade crypto.

Adoption is a process already in motion in our country. We believe a center for education aimed to law-makers can aid that process.  

Source: https://www.linkedin.com/posts/fernando-aldana-zamar_criptoactivos-compliance-y-tributaci%C3%B3n-empresarial-activity-6884151502383009792-NcdM

[FEASIBILITY]

ROADMAP

First stage: 1-3 months - Register the CPD as a civil organization in accordance to Argentina’s societal regulations. Stablish links with public figures, NGOs and other influential actors in the crypto-ecosystem to create bonds of collaboration. Contact and train the center’s junior staff to help improve the efficacy of later stages.

Second stage: 3-6 months - With an established relationship with public and political figures, NGOs and other influential actors, we’ll begin a workshop divided in four encounters to discuss the current legal situation of crypto assets in Argentina and develop a strategy to bring forth these ideas to national legislators and other policy makers. This workshop will include the discussion of billls that aspire to produce a more friendly regulation for crypto in our country. In the workshop, the current bills proposed in the Argentine Chamber of Deputies will be analyzed and discussed. Among them, the following are worth mentioning:

a) On November 11, 2020, Congresswoman María Liliana Schwindt presented before the Chamber of Deputies a Bill in order to establish a comprehensive regulatory framework applicable to transactions with cryptoassets.

b) On 2021, the national deputy José Luis Ramón presented a project to allow workers in a relationship of dependency and people who perform service exports, to choose to access the total or partial collection of their salary in cryptocurrencies.

Third stage: 6-12 months - We’ll start engaging national legislators and other policy makers in at least two conferences based on the results of the work of the previous stage. In this instance, we’ll try to educate key members of Parliament (such as congressmen and women who work in the Finance, Science and Innovation and Communications Committees) on the blockchain revolution and the advantages of cryptocurrency for a country with a serious inflation problem. We’ll also bring forth the conclusions of the previous stage, and the bills that were elaborated in that instance.

First stage

a) Constitution and registration of the CPD as a civil organization: 3.500 USD

·        Legal fees and taxes: 2.500 USD

·        Notary fees: 1.000 USD.

b) Junior staff retribution: 2.160 USD

·        2 junior staff members x 180 USD per month x 12 months: 2.160 USD

Second stage

a)      Workshop organization, materials and space rental: 1.550 USD

·        Co-working space: 100 USD per encounter x 4 encounters: 400 USD

·        Key guests mobility and travel expenses: 350 USD.

·        Organization: 800 USD

Third stage

a) Conferences organization, materials and space rental: 6.620 USD

·        Rental space (4 days): conference room 780 USD X 4 encounters: 3.120 USD

·        Speakers mobility and travel expenses: 3 speakers x 900 USD per speaker: 2.700 USD.

·        Organization: 800 USD.

TOTAL: 13.830 USD

Horacio Baca Amenábar (team leader). Lawyer (third best GPA in my class) specialized in parliamentary procedure and cyber law. Staff officer and legislative coordinator. Legal Theory and Economic Theory Professor at Universidad de Buenos Aires and Universidad Nacional de Tucumán. Published two books and several articles in Law symposiums, magazines and political and tech related monthlies. Co-director of the digital magazine "Trama". PhD student in Constitutional Law.

https://www.linkedin.com/in/horacio-a-baca-amen%C3%A1bar-537215198

Fernando Aldana Zamar. Lawyer (second best GPA in my class) specialized in corporate law. Legislative advisor. Master's degree in commercial law. I have well-reviewed publications in different corporate law journals, such as the following:

a) Cryptoassets: compliance and taxation: https://www.linkedin.com/posts/fernando-aldana-zamar_criptoactivos-compliance-y-tributaci%C3%B3n-empresarial-activity-6884151502383009792-NcdM

b) Financial asset tokenization: https://www.linkedin.com/posts/fernando-aldana-zamar_tokenizaci%C3%B3n-de-activos-financieros-activity-6866696277493604352-joVb

c) Digital contracting: https://www.linkedin.com/posts/fernando-aldana-zamar_pymes-y-contrataci%C3%B3n-digital-activity-6780163616768327680-ncci

https://www.linkedin.com/in/fernando-aldana-zamar/

Dante Moises Asseph. Lawyer specialized in criminal and tax law. Legislative advisor. In the last few years I’ve been acquiring skills in Data Analysis, Python and Solidity.

https://www.linkedin.com/in/dante-asseph

We'll also count with the collaboration of the following professionals:

• Marcelo Giullitti Oliva. Lawyer. Professor of Constitutional Law. Masters candidate in Political Science and Sociology at FLACSO. Member of the Strengthening Democratic Institutions Program at the Civil Association for Equality and Justice (ACIJ). Specialist in transparency, anti-corruption, justice, public procurements and open data. Author of several publications on these topics. https://www.linkedin.com/in/marcelo-alejandro-giullitti-oliva-5b2aa732/
• Benjamín Marcolongo. PhD student in physics. Expert in numerical computational problems involving machine learning, neural networks and dynamical systems. Physics and programming Professor. I majored in quantum mechanics and have developed an algorithm to compute bases of irreducible spherical tensor operators. https://www.linkedin.com/in/benjamin-marcolongo-25365991
• Raúl E. Sendín. Expert in Digital Marketing and Community Management from the National Technological University of Buenos Aires. Financial analyst. Crypto-trader. Investor. https://www.linkedin.com/in/ra%C3%BAl-enrique-send%C3%ADn-a47995159

[AUDITABILITY]

Metrics of success

We’ll use a combination of qualitative and quantitative metrics of success to ensure the projects auditability.

Quantitative metrics

Second stage:

-Number of tech, digital and fourth-generation human rights NGO’s engaged in the workshop.

-Number of political and legislative advisors engaged in the workshop.

-Number and influence of crypto-related public figures engaged in the workshop.

-Number of bills analyzed and discussed in the workshop.

-Number of bills drafted or updated for political consideration in the workshop.

Third stage:

-Number of national congressmen and women attendants at the conferences.

-Number of other policy makers and political figures involved in the conferences.

-Number of bills originated in the CPD that are introduced in the National Congress.

-Number of bills originated in the CPD that are passed by any of the Parliaments Chambers.

-Number of changes in the current cryptocurrency legislation.

Qualitative metrics:

First stage:

-Constitution of the CPD as a civil organization in accordance to Argentina’s regulations.

-Assembly of a solid team in order to face stages two and three.

Second stage:

-Constitution of a solid alliance to promote and educate legislators that include fellow legislative advisors, NGOs and crypto influencers.

-Performing of an in-depth analysis of the current regulatory framework of cryptocurrencies in Argentina, and elaboration of a common strategy to achieve a friendlier regulation that recognizes our people’s interest in crypto.  

-The drafting and discussion of serious bills that are viable for Argentina and can be successfully presented to legislators and policy makers.

Third stage:

-Engagement of a large number of legislators, particularly congressmen and women who in the Finance, Science and Innovation and Communications Committees of Parliament, to educate them in the crypto revolution, its advantages and dissipate any fears and doubts related to Ponzi schemes and other fraudulent activity that is irrationally linked to crypto in the public discussion.

-Engagement of legislators of different backgrounds, ideologies and parties to develop a multi-partisan discussion.

-Generation of interest in the bills drafted and updated in the second stage.

Our proposal aims to engage key actors, such as legislators and other policy makers, in a broad discussion of the blockchain revolution and its advantages for a country with a discredited currency and a long-term inflation problem, that has started a strong movement towards adoption in the general population, with a blossoming tech sector.

We’ll be successful if that discussion involves an important number of legislators, especially those related to the Committees that eventually will address any bill related to crypto regulation, and if the bills that incorporate our people’s enthusiasm for crypto in a serious and viable manner are debated and eventually passed. It will be also be important to give legislators the tools to elaborate solid bills of their own from a parliamentary technique perspective.

Finally, we’ll consider a parameter of success the education of legislators and policy makers on the technological revolution that constitutes the blockchain and the possibilities of serious and reliable ecosystems such as Cardano.

We’ll aim to contrast and clearly distinguish this revolution from any kind of Ponzi-scheme that is unjustly and irrationally attached to crypto in the public debate.  

This is an entirely new proposal, but some of the team members have already been funded in Fund7 for a different, unrelated proposal (https://cardano.ideascale.com/c/idea/382571).

SDG Rating

SDG goals:

Goal 12. Ensure sustainable consumption and production patterns

Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

Goal 17. Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development

SDG subgoals:

16.6 Develop effective, accountable and transparent institutions at all levels

Key Performance Indicator (KPI):

16.6.1 Primary government expenditures as a proportion of original approved budget, by sector (or by budget codes or similar)

#proposertoolsdg