The new law project, proposed by Deregulation Minister Federico Sturzenegger, would allow investment funds to invest in digital assets, the issuance of securities using decentralized technologies, and give full validity to smart contracts, modernizing outdated national market rules.
Key Takeaways
An Argentine deregulation bill lets investment funds buy digital assets, unlocking billions in potential demand.The draft approves the full tokenization of negotiable securities to create faster and cheaper stock markets.Smart contracts gain full legal recognition, enabling automated payments and the use of crypto as collateral.Argentina is on the verge of starting a new modernization phase of its financial market rules with decentralized technologies, tokenization, and digital assets at its center.
First and foremost, the project proposes allowing investment funds to invest in digital assets when in agreement with the fund’s investment policy. This would open a demand for billions in digital assets, according to early estimates.
Also, the document approves the tokenization of all negotiable securities, including issuance, custody, transference, and sale of these assets using decentralized technologies. This would modernize the whole stock and securities markets, as market participants take advantage of quicker, cheaper, and more efficient operations.
Digital assets, such as bitcoin, are also considered for collateral. Loans could be secured with bitcoin and other digital assets, opening the traditional system to crypto natives whose capital is concentrated mainly in these investments.
Smart contracts are also given full legal recognition, meaning that traditional contracts, including rent agreements and mortgages, could be issued on the blockchain. In the same way, redemptions, automatic payments, and foreclosures could also happen without a judge’s ruling, as smart contracts would enable these operations automatically.
