Regulation on Digital Identity and Blockchain ​​in Latin America and special treatment of the Argentine Law Identity (Part 2)

As we revealed in our article on "Regulation on Digital Identity and Blockchain in Latin America and special treatment of the Argentinean Law", we tell you more about the current regulations in Argentina as contemplated by the Argentinean law.

IDENTITY: SPECIAL TREATMENT OF THE ARGENTINE LAW

According to the personal data protection principle, it must be concluded that in Argentina all the personal data of an entity is part of its identity. Therefore, any personality attribute must be considered personal data and protected following the provisions of the Argentine Law on Personal Data Protection.

OWNER OF THE DATA

Although the Argentine Law on Personal Data Protection does not expressly mention it, the rule leads us to conclude that, given the powers granted to the owner of the data, the natural person or legal entity is the owner of the data. The entities that manage them can only do so concerning those faculties.

DIGITAL DOCUMENTS

Since self-sovereign identity projects involve the creation of a computer system, it is necessary to consider whether or not a document generated by electronic means has legal validity in Argentina. According to the Civil and Commercial Code of the Argentine Republic Nation (the “CCyCN”), legal acts can be expressed by written means, whether physical or digital. Article 286 indicates that: The written expression can take place by public instruments, or by private signed or unsigned instruments, except in cases where certain instrumentation is imposed. It can be recorded on any support, provided that its content is represented with intelligible text, even if its reading requires technical means.

DATA TRANSFER

There is no prohibition for a person’s data to be transferred abroad; that is, and unless a special rule is issued in this regard, there is no obligation to keep the data in the country. However, under article 12 of the Argentine Law on Personal Data Protection, a person’s data cannot be transferred to a jurisdiction that does not present an adequate level of personal data protection. 

BLOCKCHAIN REGULATION

Currently, there is no regulation on blockchain technology. The only existing regulation on this technology is given by Decree 182/2019. This standard includes third parties that provide the service of “blockchain operation for the preservation of electronic documents, management of smart contracts and other digital services” within the category of “trust service providers”, contemplated in article 36 of the Annex. In this regard, the standard does not provide further details and the regulation of this section is pending.

DIGITAL SIGNATURE

In Argentina, so-called digital signatures and electronic signatures are regulated by the Argentine Digital Signature Law. The difference between the two types of signatures is legal and consists in the fact that digital signatures use a digital signature certificate issued by a certifier licensed in Argentina or recognized by the enforcement authority of the Argentine Digital Signature Law. In other words, an electronic signature is everything that is not a digital signature from a legal point of view, even when it is a digital signature from a technical perspective. The difference between both types of signatures has consequences on the effects they have on the act in which they are involved. On the one hand, digital signatures are the only ones suitable to replace holographic signatures, when these are required as an ad solemnitatem formality. On the other hand, electronic signatures are suitable for signing those documents without formal requirements regarding the signature.

SMART CONTRACTS

Decree 182/2019 includes smart contract management services among the jobs that trust service providers can carry out, but this point still lacks regulations to understand its scope. 

Are smart contracts legal contracts? The doctrine indicates that smart contracts can configure contracts in the legal sense to the extent that they meet the requirements established for them. In particular, it concerns the form because smart contracts make use of electronic and not digital signatures for the Argentine legal system. If the smart contract cannot be considered a contract, there are three possibilities: (i) consider it as a promise to grant the legal contract, as established in article 1018 CCyCN; (ii) consider it as a tool used by the parties to implement and automate certain aspects of the underlying legal relationship; or (iii) take this smart contract as a principle of instrumental evidence because it has the same character, in this case, as an unsigned or signed private instrument, following the provisions of article 1020 of the CCyCN

REGULATION ON CRYPTOCURRENCIES 

In Argentina, there are different regulations on cryptocurrencies. The first rule issued on the matter was in the area of ​​prevention of money laundering and financing of terrorism. Following this rule, the 2017 income tax reform provided for the inclusion of profits generated by the sale of cryptocurrencies. Recently, the Federal Administration of Public Revenues has forced certain players in the Argentine blockchain industry, mainly exchanges, to report the operations of their clients. The Central Bank of the Argentine Republic issued Communication “A” 6823, which limited the number of cryptocurrencies that can be purchased from an entity outside the country using a credit card. Finally, as of decree 796/2021, companies that carry out transactions with cryptocurrencies are taxed with the tax on bank credits and debits.

How are cryptocurrencies legally categorized? Cryptocurrencies could not be subsumed in the concept of currency, neither national nor foreign, they correspond to their classification as intangible assets, in article 16 of the CCyCN, since they have a patrimonial value.

Can it be considered a means of payment? It would be possible to consider cryptocurrencies as means of payment in the commercial operations of people of voluntary acceptance. 

 

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