In an interview with the Buenos Aires Times on Friday (Feb. 4), Argentina Central Bank Governor Miguel Ángel Pesce applauded FinTechs for serving an underbanked population, but also cautioned that they were not financial institutions.
Pesce noted that it’s been “very important to make the extension of the accounts system more dynamic, reaching sectors which previously had no possibilities of opening bank accounts.”
He applauded recent changes by the Central Bank related to FinTechs, even though they have drawn criticism by some who have been affected by them.
“Not all FinTechs are the same,” Pesce said. “We insisted on the need for opening free and universal savings accounts. We did not have much success, and that space was later efficiently covered by the FinTechs. They are a new instrument, not financial entities, so we have to be very careful.
“What we have done is to oblige payment service companies to deposit 100% of the money in banks as a kind of statutory reserve requirement. This is a step in the direction of making more independent the assets of companies lending out the assets deposited in them, while on the other hand, the payment service companies profit from those deposits — deposits which were not theirs but came from third parties,” he said.
Pesce knows the Central Bank’s changes “might cause some resentment in the short term, but I believe that it helps to have a solid system, even within the context of payment services, by making sure that we do not have a problem when people lose confidence in the system and abandon it because some of these companies might fail to deliver.”
He also expects physical money to give way to digital money, calling it an “inexorable path” and noting that “electronic transactions are much more efficient than handling money because material money has very high logistic costs.”
Related: Argentina President Fernandez Cautiously Supports Bitcoin
In August, Argentina President Alberto Fernandez cautiously backed bitcoin and said he isn’t ruling out launching a central bank digital currency for the country.
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