Argentina Experiencing Rise in Stablecoin Buying Amidst Political Crisis and Hyperinflation
Industry insiders have revealed that Argentina is witnessing a surge in stablecoin purchasing as the black market dollar market prices continue to skyrocket. The country is currently undergoing its worst political crisis in 21 years, with hyperinflation causing a significant decline in the value of the fiat peso.
According to Globo, the official dollar exchange rate is 287 pesos per dollar, while the black market trades at about 600 pesos on the streets of Buenos Aires. To curb the situation, the government has set a limit of $200 per month per person for foreign currency purchases since 2019, which has prompted many savers to turn to the black market.
However, due to a shortage of dollar bills in Argentina, some individuals have started using USD-pegged stablecoins instead. Sebastian Serrano, the founder of the Brazilian crypto trading platform Ripio, revealed that their own dollar-pegged token was trading at 726 pesos on August 18. This figure happens to be 5.3% less than the unofficial black market exchange rate, also known as the “blue dollar,” being paid on the same day.
The media outlet, Globo, reported that Argentines primarily use stablecoins as a means of protecting the value of their savings rather than for making payments. However, some citizens also utilize these coins to purchase airline tickets and pay for shipments. Additionally, many people employed by foreign companies and working remotely are being paid in cryptocurrencies.
Sebastian Serrano stated that the demand for Ripio’s USD-pegged stablecoin has quadrupled since the presidential primary elections earlier this month. During the primaries, candidate Javier Milei, representing the Libertad Avanza party, secured nearly 33% of the vote, making him the frontrunner for the upcoming elections.
Javier Milei has previously shown support for Bitcoin (BTC) and has ties to the crypto industry, although he favors dollarization as a policy. Sebastian Serrano suggested that Milei’s rising popularity has attracted many investors to the crypto markets. Furthermore, Serrano predicted that Milei’s libertarian approach to the private sector could lead to a more favorable stance on cryptocurrencies compared to left-wing governments. However, he emphasized that he does not anticipate a Milei government to actively encourage the crypto industry or develop a sovereign digital currency, as seen in countries like Hong Kong, the United Arab Emirates, and Brazil.
Despite some social media claims speculating that Milei could become a “Bitcoin president” similar to Nayib Bukele in El Salvador, Serrano clarified that Milei lacks technological knowledge and passion for cryptocurrencies. Nevertheless, some members of Milei’s political faction argue that Argentina is on the verge of becoming a Bitcoin haven.
Serrano stated that Milei’s radical views expressed during his campaign are likely to give way to more pragmatic sentiments in an eventual government, as he will need to build support. The Argentinian public will choose their next president on October 22.