Argentine fintech groups had welcomed the possibility that, for the first time, workers could deposit their salaries into virtual wallets. However, lawmakers removed the provision, a move widely seen as favoring traditional banking interests.
During negotiations to secure broader support for the bill, President Javier Milei’s party agreed to exclude the article, despite polls indicating that a large majority of Argentines prefer the freedom to choose where their salaries are deposited.
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Distrust In Banks Drives Wallet Adoption
Argentine law today stipulates that workers must deposit their salaries into traditional bank accounts. Despite that law, digital wallet adoption in Argentina has soared over the past few decades.
In part, that growth reflects limited access to banking. A 2022 Central Bank survey found that only 47% of Argentines had a bank account, a gap largely driven by longstanding distrust of traditional systems.
Decades of financial instability, including the 2001 “corralito” deposit freeze, persistent inflation, and repeated restrictions on access to funds, have eroded public trust in banks and accelerated a shift toward cash and dollar-denominated savings.
In response, fintech-run digital wallets, operated by non-bank payment service providers, have expanded access to financial services across Argentina.
Platforms such as Mercado Pago, Modo, Ualá, and Lemon now rank among the most widely used. Many users without access to traditional bank accounts rely on these apps as their first point of entry into the formal digital financial system.
That’s why fintech leaders welcomed a provision that would have allowed Argentines to deposit their salaries directly into virtual wallets. However, the article was cut out of the proposed labor reform before it was even debated in Congress.
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Political Trade Off Favors Banks
Banking associations renewed their lobbying push this week. They sent letters to key senators outlining their objections to allowing salary deposits into digital wallets.
They argued that digital wallets lack adequate regulation, pose potential systemic risks, and could deepen financial exclusion.
Fintech organizations pushed back, arguing that these claims were false.
A recent study by consulting firm Isonomía also found that 9 out of 10 Argentines wanted the option to choose where to deposit their salaries. The tendency was even stronger among independent workers and those who work in the informal sector. The report also revealed that 75% of Argentines already use digital wallets daily.
Ultimately, the banking sector prevailed before the bill reached a Senate vote. According to reports, the government removed the provision to avoid straining relations with banks and to improve the bill’s chances of securing final approval.
Source: https://beincrypto.com/argentinas-congress-crypto-salary-right-blocked/
