Welcome to the latest edition of Latam Insights, a weekly round-up of the most important economic and crypto news from Latin America. In this issue, economist Steve Hanke recommends the dollarization of Argentina, plans for Bitcoin City in El Salvador are still uncertain, and Venezuela’s crypto watchdog, Sunacrip, is allegedly involved in mass layoffs.
Steve Hanke Proposes to Dollarize Argentina
Following a severe financial crisis, economist and professor of applied economics at Johns Hopkins University, Steve Hanke, has suggested dollarizing Argentina’s economy. Hanke’s proposal coincides with what Javier Milei, one of the strongest presidential candidates according to polls, is presenting in his campaign plans, which seek to address the inflation and devaluation crisis in Argentina by considering the adoption of the US dollar. Hanke is critical of the country’s debt to the International Money Fund (IMF).
In a tweet issued on April 25, Hanke wrote: “By my measure, the Argentinian peso has depreciated against the USD by 52% since Jan 1, 2022. Argentina must dump the peso and dollarize now.”
Bitcoin City Plans Still Not Registered in El Salvador
Plans for Bitcoin City, the cryptocurrency-focused city to be built in El Salvador partly using funds from the still unreleased “Volcano bonds,” have yet to be formalized. A document posted to social media on April 26 reveals that the Public Works Ministry had no project named Bitcoin City, an initiative presented by Salvadoran President Nayib Bukele in November 2021.
Despite this, the “Escape to El Salvador” team, an organization promoting relocation to the country, confirmed that the plans had not yet been introduced to the Public Works Ministry but were still underway.
Venezuelan Cryptocurrency Watchdog Lays Off Hundreds of Workers
Venezuela’s cryptocurrency watchdog, Sunacrip, has reportedly laid off over 400 workers this week. The organization’s payroll was made up of 600 workers who have been affected by the ongoing cryptocurrency-related corruption probe. The former head of Sunacrip, Joselit Ramirez, is currently under arrest for his alleged involvement in the so-called PDVSA-crypto corruption scheme.
While Venezuelan President Nicolas Maduro intervened in the organization on March 17, naming a commission to review its actions, it remains uncertain whether the watchdog will be terminated or restructured.
These developments in Latin America highlight the ongoing economic and crypto issues facing the region. Hanke’s call for the dollarization of Argentina points to the underlying instability of some Latin American currencies, making it difficult for citizens to navigate a volatile economic landscape.
Plans for the construction of Bitcoin City remain uncertain, pointing to potential issues with the allocation of funds and decision-making in government institutions. In Venezuela, the corruption probe continues to impact the country’s crypto industry, with Sunacrip implicated in recent mass layoffs.
As always, the situation in Latin America is fluid and unpredictable, with new developments on the horizon. However, these latest updates serve as a reminder of the importance of responsible governance and the need for stable, transparent economic policies across the region.