Argentina is currently facing a rise in stablecoin buying as black market dollar prices continue to spiral upward. The nation is currently experiencing the worst political crisis it has seen in 21 years, with hyperinflation eroding the value of the fiat peso. The official dollar exchange rate is 287 pesos per dollar, while the black market trades at around 600 pesos in Buenos Aires.
Since 2019, the government has imposed a cap of $200 a month per person on foreign currency buying, leading many savers to turn to the black market. However, with a shortage of dollar bills in Argentina, some individuals have started using USD-pegged stablecoins instead. Sebastian Serrano, the founder of Brazilian crypto trading platform Ripio, stated that their own dollar-pegged token was trading at 726 pesos on August 18th, which was 5.3% less than the unofficial black market exchange rate known as the “blue dollar.”
Stablecoins are primarily being used by Argentines to protect the value of their savings rather than as a means of making payments. However, some citizens are using stablecoins to purchase airline tickets and pay for shipments. Additionally, freelancers in Argentina are increasingly requesting to be paid in crypto rather than fiat currency. According to Serrano, demand for Ripio’s USD-pegged coin has increased fourfold since the presidential primary elections earlier this month.
Javier Milei, the candidate for Libertad Avanza, emerged as the frontrunner in the primaries, securing almost 33% of the vote. Milei has expressed positive sentiments towards Bitcoin in the past and has other ties to the crypto industry, although he favors a policy of dollarization. Serrano believes that Milei’s rise in popularity has attracted many investors to the crypto markets. He predicts that, due to his libertarian approach to the private sector, Milei is likely to take a more favorable stance towards cryptocurrencies compared to left-wing governments. Serrano also believes that Milei would uphold users’ rights to buy cryptoassets but does not expect him to encourage the crypto industry like Hong Kong or create a sovereign digital currency like Brazil.
Related Post
However, Serrano does not believe that Milei will become a “Bitcoin president” like El Salvador’s Nayib Bukele. While some members of Milei’s political faction argue that Argentina is on the verge of becoming a “BTC haven,” Serrano points out that Milei lacks expertise in technology and does not share Bukele’s passion for cryptocurrencies.
Despite the differing views on Milei’s stance on crypto, it is clear that stablecoin buying is increasing in Argentina as a means of protecting the value of savings. As the country continues to face economic uncertainty and hyperinflation, individuals are seeking alternative ways to preserve their wealth. The upcoming presidential election in October will further shape Argentina’s economic policies and potentially have an impact on the crypto industry in the country.
In conclusion, Argentina’s current political crisis and hyperinflation have led to a surge in stablecoin buying as citizens look for ways to protect the value of their savings. While stablecoins are primarily used for safeguarding wealth, some Argentines are also using them for transactions and receiving payments. The rise in popularity of Javier Milei, the frontrunner in the recent primaries, has attracted more investors to the crypto markets. However, the extent of his support for the crypto industry remains to be seen. As the country heads towards the presidential election, the future economic policies in Argentina will have a significant impact on its crypto landscape.
