Project launched to regulate tokenization in Argentina

The Argentine Fintech Chamber, an organization that brings together financial services technology companies, and Crecimiento, a movement that seeks to transform Argentina into a technology center related to cryptocurrencies, came together to present a project that seeks to shape the regulation of cryptoassets.

During the Argentina Fintech Forum event held on October 30 at the Usina del Arte, in Buenos Aires, announced a proposed regulatory sandbox for RWA tokenization. What is this about?

First of all, it should be noted that RWA is the English acronym for real world assetswhich translates to “real-world assets.” This concept refers to cryptoassets that, through a tokenization process, digitally represent traditional financial assets such as real estate, bonds, raw materials, among others. This facilitates its purchase, sale, transfer or fractionation.

According to estimates, the Argentine Fintech Chamber warns that the size of the tokenization market was USD 600 billion by the end of last year and that it could grow 26 times by 2030. This would take the figure to USD 15.6 billion, which is equivalent to 10% of the world’s gross domestic product (GDP).

However, due to the lack of regulations for tokens RWA in Argentina, the development of this market may be repressedaccording to the Chamber and Growth. That is why they decided to propose a sandbox regulatory that eliminates that gray panorama, a project they have been working on for more than a year.

“A regulatory sandbox is a controlled, time-limited, live testing environment that may have regulatory exemptions at the discretion of regulators,” they explained in the announcement.

Taking this into account, The proposal lies in creating a multi-agency regulatory sandboxthat is, multiple regulators. Specifically, it involves the supervision of the Central Bank of the Argentine Republic (BCRA), the National Securities Commission (CNV) and the Financial Information Unit (UIF).

Furthermore, as Milagros Santamaría communicated to CriptoNoticias, lead of regulatory department Growth, the sandbox could integrate regulators specific to the tokenization class. For example, in the case of insurance RWA, it states that it would also involve the National Insurance Superintendency (SSN).

The proposal seeks to promote the tokenization of RWA

There are two objectives behind this proposal. One is to foster innovation and economic growth by allowing companies and entrepreneurs to experiment and develop new ideas and technologies. And the other is to offer competent regulators a more complete knowledge of the use of new technologies and their implications, evaluating the impact of new rules and regulations in a real environment.

“This work of the Argentine Fintech Chamber, with the collaboration of Crecimiento, is a call to take advantage of a unique development and growth opportunity that the synergy between blockchain technology and an ecosystem of Argentine talent offers us,” the Chamber commented in the announcement. .

Santamaría clarified that There are three possible ways for the regulation of this proposal to come to fruition.. These are by joint resolution of the regulators, decision of the Executive Branch or project in Congress.

As revealed by the Growth directive, it is most likely that it will occur through the first option, given that They are in conversation with regulatory agents about the proposal and showed interest in accepting it. In fact, last week, Alejandro Rodríguez Ariola, a lawyer for the CNV, announced in a conference reported by CriptoNoticias that they were working on regulations for tokenization.

Given the advanced conversation they are having with regulators, Santamaría maintains that the tokenization sandbox could come into force by joint resolution at the end of the year or at the latest at the beginning of the first quarter of 2025.

The specialist also pointed out that the proposed sandbox is for a duration of 12 months with the possibility of being able to extend it for the same time frame twice as long, that is, three years in total.

«The intention would be that, from the moment the implementation is allowed and the first period of application, web3 products and different platforms emerge that allow web3 and DeFi operations that solve or address the economic and financial problems of Argentines, and therefore Therefore they are normalized in a way that the regulatory entity and the consumer stop being afraid of them,” said Santamaría.

According to your view, The ideal would be for the projects that apply to be able to retain special licenses once the sandbox ends.with the possibility for the regulatory entity to see if it is necessary to clarify regulatory definitions.

To know more details about this regulatory proposal, you will soon be able to read a complete interview that CriptoNoticias did with Santamaría, which will be liked here as soon as it is published.

Why are real-world assets tokenized?

RWA tokenization converts physical or financial assets into digital tokens that exist on cryptocurrency networks. This process allows ownership or participation in these assets to be represented through tokens, which facilitates access, purchase, sale, transfer or fractionation.

When a traditional asset, such as a building or a work of art, is tokenized, its value can be divided into smaller parts, making it simpler to buy and sell on digital platforms. This means that people with less capital can invest in a fraction of these assets, without needing to acquire the entire asset.

Its development in cryptocurrency networks also eliminates intermediaries, such as banks or managers, who tend to make processes slow and expensive. This means that transactions can be carried out directly between buyers and sellers, which reduces costs and accelerates exchange.

Smart contracts in these networks also make it possible to automate aspects such as the payment of dividends or the transfer of ownership when certain conditions are met, simplifying the management of these assets.

Additionally, tokenized assets offer more transparent data, as Transactions are recorded on the networkwhich allows you to verify the ownership and history of the asset. This provides security and reduces the risk of fraud, since all information about transactions and owners is publicly available.

Taken together, tokenization seeks to transform the way physical and financial assets are traded, making them more accessible, liquid and efficient for a greater number of people.