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Under the leadership of libertarian President Javier Milei, Argentina’s new government has proposed the ‘Law of Bases and Starting Points for the Freedom of Argentines’ to Congress. Announced on December 27, this comprehensive bill encompasses reforms across various domains, including a significant focus on the regulation of cryptocurrency for tax purposes.

The bill introduces an “asset regularization scheme,” allowing taxpayers to declare certain assets, including cryptocurrencies, without needing to substantiate their origin. This move aims to simplify and encourage the legalization of digital asset holdings, even for those who previously may not have fully disclosed these for tax reasons.

Under the proposed legislation, a staggered tax rate is set for the declaration of assets. Taxpayers declaring by March 2024 would be subject to a 5% tax rate. This rate increases to 10% for declarations made from April to June 2024 and further escalates to 15% for declarations from July to September 2024.

This initiative aligns with Argentina’s broader commitment to fostering a more transparent and straightforward approach for individuals to regularize their cryptocurrency holdings. It also corresponds with the government’s recent decree, ‘Bases for the Reconstruction of the Argentine Economy,’ which hinted at the potential for accepting cryptocurrencies under specified conditions.

President Milei, inaugurated on December 10, has embarked on a bold agenda of economic reform, which includes dissolving the central bank and reducing government size and expenditure. Despite not being an outright pro-crypto advocate, Milei’s principles align closely with many aspects of the cryptocurrency ethos, emphasizing technological advancement and a transition towards a contract-based free society.

In a November news report, Milei indicated Bitcoin as a viable alternative to traditional monetary systems, viewing it as a return to money’s private-sector origins. However, Hernán González of Bitcoin Argentina clarified that while Milei acknowledges the significance of cryptocurrencies, they are not a primary focus of his administration, as Milei himself admits to not being a specialist in the field.