Argentina’s latest financial policies are making headlines, particularly the government’s effort to draw hidden dollars out of the shadows and into the formal banking system. Central to that effort is a significant shift: raising the thresholds for reporting large cash deposits and purchases of real estate or vehicles. But what does this mean for banks and why should everyday citizens care?  

To encourage Argentines to deposit previously undeclared cash, the government has nearly doubled the reporting threshold. Under the updated rules, banks are now required to notify authorities only when a person deposits more than 40 times the monthly minimum wage in cash, as outlined in Ley 25.246. Similar adjustments have been made for cash-intensive purchases, such as property and vehicles. Additionally, financial institutions can no longer rely solely on tax returns to confirm a customer’s identity during onboarding.

At first glance, these resolutions might seem to indicate that regulatory requirements are relaxing. But the foundational obligations under Argentina’s anti-money laundering (AML) regime remain firmly in place. Banks are required under Argentina’s AML regulation to monitor all their customers’ transactions, including all cash transactions, not just those at or above the government reporting threshold. And they must investigate transactions that deviate from expected financial behavior. Though changes will need to be made to policies and systems to reflect the new reality, the foundational AML requirements remain intact.  

This continuity is especially important in light of broader economic policy shifts. The government’s cash normalization plan is expected to increase the flow of physical currency into the banking system, reintroducing cash into formal channels. While this move can support financial inclusion and economic stability, it also heightens exposure to the inherent risks of cash: limited traceability and a degree of anonymity that make it attractive for money laundering. 

It’s important to recognize that holding cash is not illegal. Many individuals do so for entirely legitimate reasons, such as safeguarding their savings against inflation. However, cash may in some cases  originate from illicit sources, and individuals involved may be unwilling to provide information that could reveal the true origin of their funds. To avoid detection, some may engage in “structuring”, a practice involving repeated cash deposits just below mandatory reporting thresholds or spreading deposits over several days. 

These behaviors are among the high-risk typologies outlined in Resolution 14/2023, which remain relevant in today’s context. For financial institutions, having a comprehensive view of the customer across behavior, transaction history, and expected activity can support stronger assessments of whether the volume, frequency, and patterns of cash movement reflect legitimate use or indicate elevated risk. 

Furthermore, because banks can no longer rely on tax documents for client onboarding or verification, they must adopt alternative methods to confirm a customer’s identity and financial profile. In addition to Know Your Customer (KYC) practices, critical components of that holistic risk profile include understanding the customer’s line of business to better gauge the potential source of funds, as well as screening customers for sanctions, adverse media or PEP (Politically Exposed Person) status. Having these insights helps to assess whether cash activity aligns with the customer´s risk profile and source of funds.   

These policy changes present both an opportunity and a challenge. They offer a chance to bring more funds into the formal economy, while also requiring financial institutions to sharpen their oversight. These changes may prompt banks to review their  AML controls, enhance customer due diligence and invest in tools that provide an understanding of customer behavior and risk in an effective manner.  

By taking a proactive, risk-based approach, financial institutions can help ensure that this new chapter in Argentina’s financial policy leads to sustainable growth, not unintended exposure.