Argentina's President Prepares Bill to Penalize Central Bank Currency Issuance with Prison Time

In an unprecedented move, Argentina's President Javier Milei is set to challenge the economic status quo with a legislative proposal that could drastically alter the country's financial landscape.

By targeting central bank currency issuance with potential prison sentences and emphasizing the criminalization of seigniorage, Milei's plan not only aims to purify Argentina's economy but also paves the way for his ambitious goal of dollarization.

This bold step, amidst his notable support for Bitcoin, marks a pivotal moment for Argentina's economic future and the global cryptocurrency community.

Defining Seigniorage as a Criminal Offense

It has been revealed through local media reports that Argentina's President, Javier Milei, announced the submission of a bill to Congress that would subject the issuance of currency by the Central Bank to prison sentences.

The bill is described as "defining seigniorage(*1) as a criminal offense," stating that "whether direct or indirect, in cases where the Central Bank has provided fiscal support, those in favor, including the Central Bank's Governor, Board of Directors, the President of the Nation, and related officials, will be sent to prison."

(*1)Seigniorage, an economic term referring to the profit made from currency issuance - the privilege of issuing currency, is the profit derived from issuing currency and banknotes, after deducting the manufacturing costs.

This legislative initiative aims to maintain a constant supply of currency while the Milei administration purifies the economy, a process that is expected to precede Milei's campaign promise of "dollarizing the economy.

The project is still a bill and, as such, requires discussion and approval by Congress in the future.

Javier Milei, known for advocating the abolition of the Central Bank and the Argentine peso and for the dollarization of the economy, has also attracted attention from the cryptocurrency industry due to his past support for Bitcoin.

Last year, it was reported that the use of cryptocurrencies like Bitcoin in contracts was authorized in Argentina.