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Argentina: Paper Replaces Blockchain For New Business Registrations

Argentina’s central government has announced that it intends on suspending new business registrations for a period of 180 days whilst it replaces its existing blockchain based system, with one which exclusively uses paper-based records.

The national ‘Companies for Simplified Shares’ office (known locally as ‘SAS’, the acronym of its official Spanish name) will not be accepting new submissions until this period of transition is complete. This news was revealed in an interview with Ricardo Nissen, which appeared in local publication ‘La Nacion’ in late February.

Nissen states that his intention is to “reorder” the registration of companies so that “the ICJ has interference in the control of its constitution”. He continued to hail the introduction of a brand new system of record-keeping, based exclusively on paper rather than digital methods of storage or backup.

In response, the Association of Entrepreneurs of Argentina (ASEA) has expressed its problems with this proposition of “suspend[ing] the digital registry and the possibility of preparing digital books by the Simplified Stock Companies (SAS)”.

“That contradicts the norms that regulate the other types of societies, because in this case, if the digital files disappear there is no written record left…

Today we cannot control the SAS , which puts them in a situation of inequality with respect to the other types of societies. The intention is that they have a documentary inscription so that third parties can control the protocol,”

Ricardo Nissen (La Nacion, via Google Translate)

It is a move which appears to be a part of national reforms to business laws and regulation in Argentina: following the election of its present government late 2019, led by the now-incumbent President Alberto Fernández.

Reuters published a report on March 2, 2020 entitled ‘Investors fear IMF negotiations will let Argentina off the fiscal hook’ which concerns the announcement of a new scheme which is being discussed by Argentina and the International Monetary Fund (IMF), which Reuters describes as the country’s “biggest lender”.

The news follows a previously released joint statement made in February 2020, in which the IMF and Argentina announced the beginning of ‘Article IV’ consultations.

This will see the IMF being invited to review the national accounts as part of ongoing talks about:

“a possible new program that would replace a defunct $57 billion loan agreement struck by the previous government in 2018…

“part of a broader restructuring of about $100 billion in debt that Argentina’s government says it cannot pay unless given time to revive stalled economic growth”.

Reuters

Back on February 20, 2020: Financial Times ran with the headline ‘Investors brace for losses in Argentina debt talks’ – and on March 1, 2020 the Argentinian government announced that it had hired Lazard, HSBC and Bank of America to help the brokerage of debt restructuring.