Argentina regulator authorizes Bitcoin-based futures contract

The National Securities Commission of Argentina (CNV) has authorized the trading of Bitcoin-based futures contracts pegged to the Matba Rofex index, an Argentinian stock exchange for futures markets and financial and agricultural assets.

The authorization came at the request of Matba Rofex itself, and was granted as part of a public-private collaboration project in which companies and regulators are proposing new digital products for the capital market in Argentina.

In practice, it is the first initiative of its kind in Latin America. It seeks to attract investors who want to increase their exposure to crypto assets and have only been able to do so through regulatory markets — for at least almost a decade, these contracts have been traded on unregulated exchanges.

Negotiations are expected to begin in May, when Matba Rofex expects to have a valid agreement with a payment services provider (PSP) registered with Argentina’s central bank to launch such contracts. As an unsecured investment, investors will need to deposit at least 40 percent of the contract value as collateral.

The index will be measured based on the price of the cryptocurrency on the various platforms and exchanges that trade the Bitcoin-Argentinian peso (BTC-ARS) pair. The contracts will be negotiated and settled in pesos, meaning that the new instruments will enable locals to gain exposure to the price of the cryptocurrency without actually holding the asset.

It may sound strange for investors to see crypto assets as a solution to volatility. But it makes sense in a country with frequent currency crises and inflation exceeding 100 percent in 12 months.