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Contxto – When pairing technology with a regulatory body, the latter can make for an awkward dance partner, as shown in Argentina.
The government in Buenos Aires will suspend the country’s blockchain project for registering new companies, based on statements made last week.
According to Ricardo Nissen of the General Inspectorate of Justice (IGJ), this will lead to restructuring the process so that the IGJ can participate.
Consequently, as of the second week of March, the blockchain project will be put on hold for an estimated 180 days. That means business owners will now have to register their companies the old fashioned way, on paper (yipee).
Switching gears, er, governments
The previous administration under Mauricio Macri, had launched this initiative dubbed the “Simplified Stock Companies” (SAS for its Spanish acronym) in 2017.
At the time, its purpose was to speed up the process of registering new companies. Specifically, within 24 hours as opposed to the 55 days, it took with the good ol’ pen and paper methods.
For Macri’s government, speed would translate into more investments for Argentina. But now Nissen from the IGJ doesn’t agree and labeled the SAS’s digital system “madness.”
Stepping on toes
For the government official from the IGJ, this “madness,” is due to the fact that businesses (mostly small and medium-sized) under the system don’t have to comply with the same regulations as other companies registered under different models.
Unsurprisingly, entrepreneurs were the first to recoil at the announcement.
“Up until today, accounting books were kept digitally through the blockchain system. That guarantees absolute transparency and inviolability in information management,” stated Alejandro Ramírez, a representative on behalf of the Association of Entrepreneurs of Argentina (ASEA).
“Now, we will have to return to a 19th-century system, completely outdated and subject to tampering.”
One step forward, two steps back. This awkward jig continues.
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