CBDC will improve tax collection — Argentine central banker

In a high-profile declaration of support, Agustín D’Attellis, the Director of the Central Bank of the Argentine Republic (BCRA), threw his weight behind Minister of Economy Sergio Massa’s advocacy for the adoption of a central bank digital currency (CBDC) as a panacea for the nation’s economic woes.

Juan Agustín D’Attellis Noguera, a director of Banco Central de la República Argentina, the country’s central bank, publicly supported the Minister of Economy Sergio Massa in his promotion of central bank digital currency (CBDC) as a remedy for the national economy.

Giving commentary on local television, Noguera expressed his belief that the “digital peso” could help stabilize the Argentine economy as soon as 2024. In the official’s opinion, the key feature of the CBDC is its traceability, which would help the government to collect taxes:

“By having traceability of operations with a digital currency because it is not known who does them, but there is evidence that they were done, you broaden the tax base. This will allow you to raise more without having to raise taxes and even lower them.”

The CBDC will also help to solve the nation’s monetary problem, as the unstable local currency, the Argentine peso, often competes with the United States dollar even as a payment method, according to Noguera.

Related: Buenos Aires to issue blockchain-based digital ID

Noguera spoke about the digital peso in a very definite manner, assuring that the CBDC would be introduced gradually, coexisting with cash, with a complete replacement of paper fiat currency happening at the final stage of the project.

On Oct. 2, Massa, who is also a presidential candidate, pledged to launch a CBDC if elected to “solve” Argentina’s long-lasting inflation crisis. According to election polls, Massa is slightly trailing Javier Milei, a pro-Bitcoin BTC$62,959 and anti-central bank candidate who wants to adopt the U.S. dollar as Argentina’s currency.

D’Attellis, during a televised appearance, articulated his conviction that the “digital peso” (PAD) held the potential to restore stability to the Argentine economy, with a timeline as early as 2024. He emphasized that the CBDC’s distinguishing feature lay in its traceability, a feature that would enable the government to expand its tax base. In his words, “Through the traceability of transactions facilitated by a digital currency, we can identify the parties involved, thereby broadening our tax revenues. This, in turn, could lead to reducing, or at least not increasing, tax rates.”

Beyond its fiscal implications, the PAD also offers a viable solution to Argentina’s ongoing monetary quandary. The local currency, the peso, perpetually vies with the American dollar, even in the realm of everyday transactions.

D’Attellis spoke with unwavering certainty about the “digital peso’s” introduction. He affirmed that its rollout would be gradual, coexisting harmoniously with physical currency until the final phase, where paper bills would gracefully step aside.

Turning the spotlight to October 2nd, Sergio Massa, serving as both the acting Minister of Economy and a presidential candidate, pledged to launch a CBDC if elected, in a bid to “resolve” Argentina’s persistent battle with inflation. The political arena indicates that Massa finds himself in a close race with Javier Milei, an advocate for Bitcoin and a staunch opponent of central bank policies. Milei envisions adopting the United States dollar as Argentina’s official currency, setting the stage for a riveting electoral showdown.