Argentina’s capital, Buenos Aires Industry insiders claim that stablecoin purchases have significantly increased in Argentina as the nation struggles with soaring black market dollar exchange rates. At the same time that Argentina is experiencing what some experts refer to as the “worst political crisis in 21 years,” the peso, the country’s fiat currency, is losing value due to severe hyperinflation, which is driving up demand for digital assets.
The current official exchange rate in Argentina is 287 pesos to 1 dollar, but on the black market, dollar prices have risen to almost 600 pesos to 1 dollar on the streets of Buenos Aires. Since 2019, the government has strictly limited each person’s ability to buy foreign currency to $200 per month. This restriction has prompted many savers to look for alternatives on the illicit market.
However, due to a lack of readily available genuine U.S. dollar bills, some Argentinians are resorting to stablecoins pegged to the greenback as a hedge against currency depreciation. The founder of the Brazilian cryptocurrency trading platform Ripio, Sebastian Serrano, noted that on Friday, August 18, the dollar-pegged token on his platform was trading at a price of 726 pesos, or about 5.3% less than the unofficial black market exchange rate for the same day, locally referred to as the “blue dollar.”
It’s important to note that many Argentinians use stablecoins more for savings protection than for daily transactions. However, some residents are using these digital assets to pay for shipping, buy plane tickets, and even get paid for working remotely for foreign employers.
According to Serrano, interest in Ripio’s USD-pegged coin has increased by a factor of four since the presidential primary elections earlier this month, suggesting that stablecoins are becoming more popular in Argentina. Javier Milei, a candidate for Libertad Avanza, won these elections with about 33% of the vote, solidifying his position as the front-runner for the forthcoming elections.
Although Milei has previously expressed enthusiasm for Bitcoin (BTC) and still has ties to the cryptocurrency community, he favors a dollarization policy. However, Serrano contends that Milei’s increasing popularity has stoked interest in the cryptocurrency markets because of the perception that his libertarian approach to the private sector is more beneficial to cryptocurrencies than left-wing governments.
Serrano believes that users’ rights to buy cryptoassets will likely be preserved under a Milei administration. But unlike Hong Kong, the United Arab Emirates, or Brazil, he doesn’t see the Milei government actively supporting the crypto sector or establishing a national digital currency.
Although there has been talk on social media about Milei perhaps becoming a “Bitcoin president” like Nayib Bukele of El Salvador, Serrano claims that Milei lacks the technical expertise and enthusiasm for cryptocurrency that Bukele possesses.
Some in Milei’s political group disagree, though; one of them recently claimed that Argentina would turn into a “BTC haven.” Serrano admits that in order to gain support for a future government, Milei’s more extreme campaign statements may need to give way to pragmatism.
On October 22, Argentinians will vote to choose their next president, a crucial decision that might further reshape the country’s economic and cryptocurrency environment.
