Fernández, in a Coindesk interview, said, “The city’s decision has exploratory and regulatory purposes that will help develop adaptable crypto regulation.”
Last week, a city official announced that Buenos Aires would become part of the validators in the Ethereum network. The announcement was made during Argentina’s ETHLatam conference.
This will make the Argentine city one of the first public institutions in the world to engage in Ethereum’s infrastructure. Consequently, private companies will work with the city to build validator nodes (computers operating the Ethereum client software) for installation by next year.
The validators are part of the Proof-of-Stake consensus mechanism being deployed along with the upcoming Merge in September. They will be responsible for storing data, processing transactions, and adding new blocks to the blockchain.
Each validator must stake 32 Ethers (currently valued at approximately $60,300) before operating. However, the city’s secretary of innovation and digital transformation, Diego Fernández, didn’t disclose how many nodes would be deployed while making the announcement last week.
In his comment, he said,
“The city’s decision has exploratory and regulatory purposes that will help develop adaptable crypto regulation.”
Though Argentina was once regarded as a crypto-friendly country, her stance on digital assets has since evolved, albeit unintentionally.
In May, the International Monetary Fund (IMF) reportedly pressured the country’s central bank to ban unregulated crypto transactions in traditional banks.
However, the country's capital has continued to view the emerging market favorably. Buenos Aires Mayor, Horacio Rodrguez Larreta, stated in April that residents would be allowed to pay taxes with cryptocurrencies.
He then clarified that cryptocurrency companies would handle the procedure since the local government can only accept Argentine Pesos.
Argentines are among the world's top digital asset enthusiasts, owing in part to the country's chronically high inflation and the local Peso's years-long depreciation. Locals, in turn, have begun to invest in cryptocurrency to protect their funds from losing purchasing power.