Photo by Diego Levy/Bloomberg.

The Central Bank of the Argentine Republic (BCRA) is starting a local financial revolution. On Sunday, the bank’s vice president, Lucas Llach, announced at a meeting of the Argentine Banking Marketing Association (AMBA) that BCRA is working to digitize all checks. “This is an innovation that today cannot be done,” said Llach. The move breaks ground in a financial system that relies almost entirely on paper. Argentines are accustomed to depositing paper checks and paying in efectivo — the local term for cash money.

Bank customers will soon be able to split and transfer money more easily. Llach sees the innovation, which will roll out over the coming year, as a way to democratize banking. “Electronic banking allows us to provide services at lower costs and in a simpler way,” he said. “Its main effect is inclusion.” He will continue to expand credit as a means of payment. The BCRA also plans to implement “digital identity,” which replaces passwords with biometrics for easier access to personal financial services.

The rollout is not without controversy. Llach also wants to create fintechs, or internet companies dedicated to financial business. Banks worry about competition. But as BCRA Chairman Federico Sturzenegger has said, nothing prevents the banks from building their own fintechs.

Another potential controversy is the impact of the new technology on labor. “Statistics show that technologies drive the demand for labor,” said Llach. “There is more competition for workers and wages increase.” But leading economists are not so sure. Technologies usually increase demand for high-skill workers, but have ambivalent or even negative effects on the demand for low-skill workers. The BCRA has already gotten flack from mail companies and their associated unions for doing away with paper. It should anticipate more reactions from labor leaders as the program unfolds.