DOLLARIZATION OF THE ARGENTINE ECONOMY IS PROOF OF THE EFFICIENCY OF CRYPTOCURRENCIES
With Javier Milei's victory in Argentina's presidential elections, Latin America — which already has Nayib Bukele, the president who made bitcoin an official currency in El Salvador in 2021 — gains another head of state who is enthusiastic about cryptocurrencies.
Paradoxically, the main banners of Milei's political campaign, the dollarization of the economy and the abolition of the Argentine Central Bank, could suppress demand for cryptoactives in one of the countries with the highest rate of adoption of the technology, which represents a real-world use case blockchain technology transformative
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With Javier Milei's victory in Argentina's presidential elections, Latin America — which already has Nayib Bukele, the president who made bitcoin an official currency in El Salvador in 2021 — gains another head of state who is enthusiastic about cryptocurrencies.
Paradoxically, the main banners of Milei's political campaign, the dollarization of the economy and the abolition of the Argentine Central Bank, could suppress demand for cryptoactives in one of the countries with the highest rate of adoption of the technology, which represents a real-world use case blockchain technology transformative
READ TOO
Stablecoins and Argentina: Made for Each Other
Blockchain, the distributed ledger technology behind cryptoassets, has been surreptitiously gaining its ubiquitous presence in the daily financial lives of Argentines over the last decade.
The successive hyperinflation crises, which have afflicted the country since the launch of bitcoin in January 2009, accelerated the adoption of the digital asset by leaps and bounds, driven by a dynamic different from that seen in developed economies.
More recently, stablecoins (stable currencies) surpassed bitcoin as the most demanded type of digital asset in Argentina.
With their value pegged to the dollar, stablecoins like USDC and USDT offer many of the advantages of a blockchain-native digital asset like bitcoin, without its characteristic volatility.
According to a survey by Chainalysis, a research house specializing in on-chain data, five million Argentines (>10% of the population) already make use of this digital representation of the value of North American banknotes.
In search of a safe haven, many stablecoin supporters in the country convert their salaries immediately after receiving them, seeking to stop the incessant loss of purchasing power of the local currency.
Real-world use
As this practice spread, the acceptance of cryptocurrencies by Argentine commerce grew in parallel. Today, stablecoins are widely accepted in the South American nation by different types of establishments. Tron, the blockchain with the highest degree of adoption in the country, won over the Argentine public due to its fast and cheap transfers.
According to a report released by global manager Brevan Howard, the Tron network was responsible for more stablecoin transactions in 2023 than any other blockchain, a volume largely driven by users residing in nations experiencing inflationary crises and/or dollar shortages. .
