- Collaboration between Argentine Fintech Chamber and Growth targets token market growth from $600 billion to $15.6 trillion by 2030.
- Sandbox initiative under multi-agency oversight including BCRA, CNV, UIF to foster innovation in tokenization of real-world assets.
Argentina is preparing to pioneer a regulatory “sandbox” aimed at guiding the tokenization of real-world assets (RWA). This initiative, expected to be operational by late 2024 or early 2025, is a collaboration between the Argentine Fintech Chamber and Growth, an organization dedicated to establishing Argentina as a hub for cryptocurrency technology.
Tokenization refers to the process of converting real-world assets such as real estate, bonds, and commodities into digital tokens that can be traded, transferred, or subdivided on blockchain platforms. This technology is seen as a way to enhance the liquidity and accessibility of various assets.
According to the Argentine Fintech Chamber, the market for tokenized assets was valued at approximately $600 billion as of last year and is projected to grow exponentially, potentially reaching $15.6 trillion by 2030, accounting for about 10% of the global GDP.
However, the lack of specific regulations for RWA tokens in Argentina could potentially hinder the growth of this promising market. To address this, the proposed sandbox would provide a controlled, regulatory testing environment where new ideas can be experimented with under the supervision of major regulatory bodies such as the Central Bank of Argentina (BCRA), the National Securities Commission (CNV), and the Financial Information Unit (UIF).
A regulatory sandbox allows for real-time testing of new business models or products within a set framework that may include temporary regulatory exemptions. This approach helps regulators better understand the implications of new technologies and assess the impact of potential regulations in a practical setting.
The initiative aims not only to foster innovation and economic growth by allowing companies to explore and develop new technologies but also to give regulators insights into the application and implications of these technologies in a real-world environment.
“A regulatory sandbox is a controlled, time-limited, live testing environment that may be subject to regulatory exemptions at the discretion of regulators,” they explained in the announcement.
Milagros Santamaría, the head of the regulatory department at Growth, mentioned that the sandbox could be implemented through a joint resolution by the regulators, a decision by the Executive Power, or a new legislative project in Congress. Discussions with regulatory agencies have been promising, with a joint resolution seen as the most likely method for implementation.
The proposed sandbox is intended to operate for an initial period of 12 months, with the possibility of extension for up to three years. This period is expected to see the emergence of Web3 products and platforms that address economic and financial issues in Argentina, helping to normalize these technologies among regulators and consumers.
Once the sandbox period ends, successful projects could potentially receive special licenses to continue operations, which would also enable regulators to refine and clarify regulatory definitions based on the outcomes of the sandbox experience.
This proactive approach aims to integrate modern financial technologies into the Argentine market, positioning the country at the forefront of financial innovation.
