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Argentinians now able to ditch pesos for crypto

Argentinians now able to ditch pesos for crypto

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Binance announced earlier this week that Argentinians can now buy crypto directly with the Argentine peso.

A 100% inflation rate

For a country with a more than 100% inflation rate, being able to exchange the local currency directly into crypto is a really big deal. As the purchasing power of the Argentine peso has plummeted, the crypto market has risen over 50% since the beginning of the year.

All fiat currencies have suffered tremendously, and especially since the massive central bank printing that took place at the time of Covid. The U.S. government and the Federal Reserve are seriously worried about inflation, and this is with an official rate of 6%.

For the Argentine government, a 100% inflation rate and more, must be way beyond the time to panic. The average Argentinian is the one who bears the brunt of this inflation, so having an escape hatch into crypto must be a huge relief.

Pesos to Bitcoin?

Of course, a lot of the cryptocurrencies out there are not going to hold their value, and many of them can certainly fare even worse than the Argentine peso. 

However, even from a purely defensive perspective, putting a certain amount of pesos into Bitcoin might be an excellent exchange. The purchasing power of the peso is almost certain to go down, of that there is no doubt.

On the other hand, Bitcoin has arguably just emerged from its bear market. The price can still go down as nothing is certain in markets, but given the shaky environment for banks, Bitcoin can potentially be an exit from the system for many people, and not just Argentinians.

Financial inclusion

The new service from global crypto exchange Binance will enable Argentinians to convert their pesos into crypto via their Binance wallets, or via bank or virtual transfer.

Maximiliano Hinz, Latin American director of Binance, Southern Cone, said of the service:

“ We are excited about this release. At Binance, the focus is always on our clients, and we are committed to providing them with the most fluid, safe and optimized experience. We understand the peculiarities of each country in the region. This new service will allow us to continue working for financial inclusion"

IMF pressure

The Argentine central bank released a statement in May of last year, saying that the country’s financial sector could not provide unregulated digital assets services. 

This statement came about a month after Argentina agreed a $45 million loan with the International Monetary Fund (IMF). Some might say that the central bank statement on crypto may have been prompted by the IMF demanding it, in order to receive the loan.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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