The crypto market has been plunging for months and the central bank has prohibited financial institutions while dealing with digital assets, many Argentina citizens have resorted to Bitcoin (BTC) and other cryptocurrencies as a way to hedge against the rising inflation.
Argentina has been in a struggle against inflation since 2016. The Argentine peso’s depreciation has hampered citizens’ purchasing power as a result of a number of factors, including a lack of trust in the central bank and government spending. As a result, 37.3 percent of the population is now poor, and many more have seen their savings vanish into thin air.
Argentina’s “crypto penetration” has reached 12 percent, more than double that of Peru, Mexico, and other countries in the region, according to a survey by Americas Market Intelligence quoted by Reuters.
Argentines are increasingly adopting stablecoins, in addition to Bitcoin, to preserve their money in the US dollar, particularly as their country tightens capital controls on foreign currency transactions.
When Ethereum founder Vitalik Buterin visited Argentina in December, he said that cryptocurrency adoption and stablecoin acceptability were growing in the country. He emphasised that this may change if the US currency began to exhibit severe problems.
Argentina looks to be treading carefully when it comes to regulating digital assets on a bigger scale. In a 2021 Youtube interview, Argentine President Alberto Fernandez stated, “There’s a great conversation about cryptocurrency, it’s a worldwide topic, and I must say it’s a matter of caution.”
On a more positive note, he added that “crypto has a benefit” since “it helps curb inflation” and that “it’s a solid asset in a way.”
Read more: Seventy four percent of Argentines consider buying crypto for investment: Report
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