A draft bill from Argentina's Ministry of Deregulation and State Transformation proposes permitting mutual funds, known locally as fondos comunes de inversión (FCI), to include crypto assets in their portfolios for the first time. The bill remains unofficial and awaits President Javier Milei’s signature before moving to Congress for debate.
Spanning over 144 pages, the draft aims to modernize financial regulations by integrating blockchain technology and expanding the scope of regulated investment vehicles. Key provisions would authorize both open and closed-end mutual funds to allocate portions of their holdings to virtual assets, aligned with each fund's stated investment policies something currently not explicitly allowed under Argentine law.
The bill also envisages funds designed for qualified investors that would be exempt from usual diversification limits imposed on retail-facing funds. It would legally recognize smart contracts and allow digital securities, including shares and debt instruments, to be issued and traded using distributed ledger technology. also crypto could be used as collateral, with judicial mechanisms enabling seizure of pledged assets on default, provided the relationship is non-consumer.
Protection for investors also features prominently, with the draft stipulating that clients' crypto holdings and funds must remain segregated from brokers' own assets, insulating them in cases of broker bankruptcy. The legislation would further empower the executive branch with temporary legislative authority during an administrative emergency, mirroring prior government strategies.
Argentina's high rate of grassroots crypto adoption makes it a fitting candidate for such regulatory innovation. The proposed changes could reshape how investment products operate and potentially encourage wider institutional exposure to digital assets. The government has yet to confirm details as the draft undergoes revisions, and the official version will be published once formally submitted to Congress.
Market reaction has been muted so far as the proposal remains in draft form, with investors and industry participants awaiting concrete steps from the Argentine government.
