Argentina may soon be compelled to reveal its crypto holdings by tax incentives as the government plans to combat money laundering with a new bill.

Argentina’s Ministry of Economy, the country’s economic policy manager, has drafted legislation to encourage Argentines to declare their cryptocurrency holdings by offering tax breaks.

According to a Jan. 6 article by local media Errepar, the “Externalization of Argentine Savings” draft law, aimed at preventing money laundering, was proposed by Economy Minister Sergio Massa.

The measure would oblige cryptocurrency holders to provide the government with an affidavit – a sworn declaration detailing the whereabouts of their assets.

Those who voluntarily register their assets within 90 days of the law’s implementation will pay only a 2.5% tax on their crypto holdings’ capital gains. This tax rate will rise progressively every 90 days until it reaches 15%, the ordinary capital gains tax rate in the nation.

The bill also encourages Argentines to declare holdings of other financial assets subject to capital gains taxation, such as fiat currency, shares, stocks, real estate, and even furniture.

The proposed law would require domestic and foreign holdings to be deposited in approved banks in Argentina or foreign banks regulated by the central bank or securities commission of that jurisdiction.

The measure will be introduced and debated during the next legislative session.

Argentina placed 13th overall on Chainalysis’s 2022 Global Adoption Index, indicating that emerging markets are a hotspot for crypto adoption.

Argentines have been lured to crypto due to high inflation in the country and its ease of use for cross-border transactions. Argentina’s inflation rate has nearly reached 72.4%.