Overview
The digital economy in Argentina has been steadily growing, driven by a tech-savvy population and a robust entrepreneurial spirit particularly in Buenos Aires, which is often considered the Silicon Valley of South America. In fact, twelve Argentine technology companies have reached the stage of unicorn—startups valued at over $1 billion— (MercadoLibre, Despegar, Globant, OLX and Auth0, Auth0, Aleph, Mural, Tiendanube, Bitfarms, Technisys, Ualá and Vercel), while there are many Argentine technology companies on the verge of achieving the same status.
The state of digital in Argentina in 2024
According to the Argentine Chamber of Internet (CABASE), there were 40.58 million internet users in Argentina at the start of 2024, when internet penetration stood at 88.4 percent. Argentina was home to 31.30 million social media users in January 2024, equating to 68.2 percent of the total population. In 2024 the 4G network coverage in Argentina is estimated to amount 97.68%, the internet penetration a 92.73% and the average broadband connection speed 50.40k kbit/s.
Data Privacy
The Argentine Data Protection Authority (AAIP) is charged with implementing Argentina’s Personal Data Protection Act. In 2023, government of Argentina introduced a bill to amend the current policy for personal data protection and has taken steps to adopt European standards. This bill has not been discussed in Congress yet. USG has been proactively reaching out to the Argentine Agency for Access to Public Information to promote the embracing of the Global Cross-Border Privacy Rules (CBPR) system.
Cyberecurity
Cybersecurity technology adoption in Argentina is two to three years behind more mature markets such as the UK, US, or Brazil. According to Statista, the Argentina Cybersecurity Market size is expected to reach USD 1.58 billion in 2024 and grow at a CAGR of 8.29% to reach USD 2.35 billion by 2029. Panda Security Argentina, Nextvision, UV Security SA, IBM Corporation and Oracle Corporation are the major companies operating in the local cybersecurity market.
In February 2023, Argentina signed the Second Additional Protocol to the Budapest Convention on Cybercrime. Subsequently, the Argentine Central Bank issued a regulation on Minimum Requirements for the Management and Control of Information Technology and Security Risks.
The Federal Cybersecurity Agency was established as a directorate and was restructured in 2024. It was created within the country’s intelligence agency, SIDE, and will assume the operational aspects of cybersecurity, while the Undersecretariat of Science and Technology retains oversight over cybersecurity’s regulatory aspects.
Artificial intelligence
In Argentina, AI and machine learning adoption is expanding across several industries including agriculture, manufacturing, healthcare, and the public sector including citizen services and the judiciary.
Recently, the Argentine Government created an agency named Artificial Intelligence Unit Applied to Security (UIAAS), under the Ministry of Security, to use artificial intelligence in the prevention and investigation of cybercrimes.
Fintech
As 2024 unfolds, Argentina’s fintech sector also emerged as a resilient, innovative force in the context of local and global economic challenges. Despite rampant domestic inflation, and global geopolitical turmoil, the sector demonstrated notable growth throughout 2023, evidencing its evolving maturity.
Argentina’s fintech ecosystem has experienced robust growth and is now home to about 343 local firms. According to the latest Finnovista report, the sector’s distribution highlights a balanced concentration in key verticals: both lending, and payments and remittances lead with an equal share of 16.9% each. Close behind are wealth management and enterprise financial management, capturing 14.9% and 14.6% of the market, respectively. Notably, enterprise technologies for financial institutions and insurance tech also mark their presence with 12.0% and 7.3%, while the remaining verticals together make up 17.5% of the ecosystem.
As economic conditions in Argentina remain challenging, demand for fintech services that safeguard wealth against inflation and offer yield-generating investment opportunities has rocketed in 2023. With high inflation eroding the value of cash holdings, Argentine fintech companies have presented an appealing option for consumers to protect their income.
According to the Argentine Central Bank (Banco Central de la República Argentina or BCRA), investments in Mutual Funds through accounts provided by fintech companies soared to ARS438.7 billion in July. That is, the funds that users chose to invest through Fintech grew by 183% in just six months. Furthermore, the country’s investment landscape is expanding, with four million investment accounts initiated in just the first seven months of 2023.
Cryptocurrency
Argentina ranks 15th globally and 2nd in Latin America for cryptocurrency adoption, with Bitcoin and USD-backed stablecoins being the most popular. The government recently approved the official recognition of Bitcoin in legally binding contracts, and many expect the industry to rise in popularity as more citizens use cryptocurrencies to avoid increasing inflation and conduct business transactions. Cryptocurrency revenue in Argentina is currently valued at US $193 million and is projected to reach US $343 million by 2028, with an annual growth rate of 15.37%. The number of cryptocurrency users is expected to grow from 3 million in 2024 to 3.74 million by 2028.
Market Challenges
Regulatory environment
Various aspects of the digital economy are subject to regulation in Argentina and companies entering the market must understand how to comply with associated requirements. Several examples are highlighted below.
Data protection
Argentina’s Data Protection Law requires that all databases be registered with the Agency of Access to Information, and that the consent of the owners (individuals and companies) of the personal data be procured for purposes of gathering, assigning and transferring personal data. The owners of private data have the right to access to their data, provided their requests to access the relevant database are made with a frequency of at least six months and any request must be answered within 10 days of being made. Additionally, an owner of private data has the right to request that the data be rectified, updated, erased or kept confidential by the database. Requests of this nature must be complied with within five business days of being made. Although the Data Protection Law does not prevent sharing information with potential buyers, it is strongly advised that confidentiality agreements be signed to protect said information.
USG has been proactively reaching out to the Argentine Agency for Access to Public Information to promote the embracing of the Global Cross-Border Privacy Rules (CBPR) system.
AI Regulation
In Argentina, the general background legislation that applies and/or contains specific provisions pertaining to artificial intelligence (AI) includes: the Argentine Constitution, the Civil and Commercial Code, the Personal Data Protection Act, the Intellectual Property Act, the Labor Act, the Consumer Protection Act, and the Criminal Code.
No Argentine laws have been amended to specifically address AI technology, however, recent bills have contemplated AI issues in their provisions, which have been influenced by the European Union’s regulations on the matter. Such bills mainly seek to provide guiding principles for the use of AI, including transparency, explainability, security, privacy, data protection, human supervision, responsibility and accountability.
Argentina does not have a specific regulatory agency dedicated to AI matters however, the Agency for Access to Public Information, enforces data protection regulations.
Fintech regulation
There is no fintech regulator in Argentina, although, depending on the activities conducted by the target company, the regulations of the Central Bank of Argentina, the Argentine Securities Exchange Commission (Comisión Nacional de Valores) and of the Argentine Anti-Money Laundering Authority (Unidad de Información Financiera) may apply.
Recently, the Milei administration has pledged to reduce regulations on financial technologies and provide greater freedom to startups. Since then, the Central Bank of Argentina has taken the lead in developing regulations for the fintech sector, particularly in areas such as digital payments, e-money, and virtual wallets. The Secretariat of Finance also plays a crucial role in shaping the fintech regulatory environment, particularly in matters related to taxation, anti-money laundering, and counter-terrorism financing (AML/CTF) regulations.
Market Opportunities
As Argentina embraces digital transformation, U.S. companies have a unique chance to participate in this dynamic sector, which spans e-commerce, fintech, education technologies, agriculture technologies, and more.
This year is poised to be a period of exploration and innovation for the industry, with a focus on embedded finance, blockchain applications and AI-enhanced credit scoring models. Supported by a conducive regulatory environment and one of the highest fintech adoption rates in Latin America, Argentina is well-positioned for sustained digital economic transformation.
AI and machine learning will continue to present opportunities in several sectors of the economy such as agriculture, mining, energy, industrial production, and service providers. According to a survey by the Argentine Fintech Chamber, 70% of technology-based financial services companies in the country are open to implementing open banking or embedded finance. This transition demands a nuanced approach to managing information flow, ensuring robust data protection, and maintaining stringent cybersecurity measures.
Last year, Argentina decided to allocate the full band of 6 Ghz to unlicensed technologies such as Wi-Fi. This has created opportunities for U.S. companies that provide solutions related to broadband connectivity and advanced applications such as the Internet of Things, advanced manufacturing, augmented and virtual reality, smart cities, and other innovations across several industries such as energy, healthcare, education, engineering, media & entertainment and more.