Bitcoin adoption took another boost in South America yesterday after the Argentinian central bank announced measures to tighten controls on the movement of foreign currency.
The announcement came shortly after the Argentine peso plunged over 10%, setting the long-suffering Argentinian people back further.
Only 20 years ago, the Argentine peso was 1:1 with the USD, but corruption and mismanagement has seen its economy collapse and the national currency is now artificially pegged at 72:1 USD.
The Board of the Central Bank of the Argentine Republic (BCRA) justified the new measures saying they were attempting to promote a more efficient allocation of foreign currency.
Working with the BCRA, the Federal Administration of Public Revenues (AFIP) say they have set new guidelines to ‘maintain the current quota of $200 per month whilst discouraging the hoarding foreign currency and card expenses.’
Their aim is to raise taxes on income and on personal assets at a rate 35% on purchases with credit and debit cards in foreign currency.
The Argentinian Government Is The Best Marketing For Bitcoin
The Argentinian government has a history of corruption and failed policies, and it seems whatever they do is good for Bitcoin.
Argentina is in its third year of an economic recession partly blamed on the country’s unsustainable external debt levels, and the effect is driving its citizens away from the peso and into other currencies.
Argentina is in its third year of an economic recession partly blamed on the country’s unsustainable external debt levels, and the effect is driving its citizens away from the peso and into other currencies.
In October last year, the Argentine government set a $200 monthly limit for Argentinians to purchase USD, which came just a month after they set the limit to $10,000 per month. Desperate moves indeed.
Added to the fact that Argentina’s inflation has averaged about 50% over the last 3 years and you could be forgiven for thinking the Argentinian government was Bitcoin’s marketing team.
Argentinian’s have long fled the peso, but with controls on how much USD they can now buy, Bitcoin is a natural shift for them to move into.
The evidence is clear that since the foreign exchange tightening, Argentinians have turned to Bitcoin in a big way.
According to data from Coin Dance, Bitcoin marketplace, LocalBitcoins, we can see the daily volume has grown exponentially since the government set a limit of $200.
LocalBitcoins isn’t the only platform to see volume growth in Argentina. Paxful, and all other exchanges that operate in Argentina are seeing record growth.
According to Sebastian Villanueva of Chilean crypto exchange, Satoshitango, it’s limiting the purchase of dollars that is driving South Americans to Bitcoin.
Villanueva explained that government policies and the lack of banking access for individuals and businesses is a major drive for Bitcoin adoption in Latin America.
‘Lots of people here have uneven income because they do gig work for Uber or places like that, which makes it hard for them to get a bank account. Without easy banking access, many young people in Latin America turn to cryptocurrency as a means of storing value.’
And Argentinian journalist, Emiliano G. Arnáez says successive failures from past governments is showing how Bitcoin can be an alternative that his countrymen can use.
Arnáez says how the main attributes of Bitcoin make it a better alternative to the country’s fiat currency.
‘Remember, if you have Bitcoin, they have their own Central Bank,’ said Arnáez. ‘With cryptocurrencies, there are no stocks, with stablecoins, there are no exchange restrictions. They have a high risk, of course, they do, but the Argentine economy sometimes seems to be riskier and is hacked by the governments themselves.’
Bitcoin Is A Safe Haven For Argentinians
Bitcoin is quickly becoming a safe haven for the world.
With the state of the global economy and the printing presses working overtime, everyone with any value is looking for a safe haven.
For many that is gold, but a growing number of investors are looking to Bitcoin. And in crisis-hit Argentina the growth in Bitcoin adoption has been astronomical.
There’s no doubting that Bitcoin is volatile, but if you’re from Argentina and several other countries, it’s a safe haven from hyperinflation.
And as the Fed, the ECB, and the Bank of England continue to weaken their currencies, the Bitcoin volume and adoption in these more developed nations will also grow exponentially.
We keep hearing about interesting times we’re living in, and we certainly are. It’s just good to see Argentinians have another option to see themselves through and come out the other side better off.
Hopefully with a more accountable government. But that is something we all need.
Author: Tommy Limpitlaw
A Bitcoiner since 2017 and a Bitcoin Maximalist since 2018, Tommy is our main writer and editor at Bitcoin Maximalist. Other than researching and writing about Bitcoin, Tommy loves spending time with his family and supporting his beloved Leeds United.
