Incoming Argentine President Javier Milei once again demonstrated his determination to close the Central Bank of Argentina (BCRA) on the X platform, stating that there was no room for negotiation. He also stated that he was in discussions with the International Monetary Fund (IMF) regarding Argentina’s fiscal adjustment plan and monetary policy in order to find a solution to the country’s economic problems.
Background:
Bitcoin Enthusiast President Milei’s “Shock Therapy” for Governance: Pesos Depreciated, But Crypto Policy Still Pending
Article Contents:
Argentina Could Become a “Bitcoin Paradise”
Bitcoin Rescues People Affected by Severe Inflation
Will Argentina Be the Next El Salvador?
Bitcoin advocate and President of Argentina, Javier Milei, officially took office on December 10th. The new president, known as the “Bitcoin fanatic,” implemented radical economic policies to address the fiscal deficit and control the country’s inflation rate, which was approaching 150% annually. These policies included a devaluation of the national currency, the peso, by more than half, as well as a series of austerity measures to reduce government spending. Milei’s actions have received recognition from the International Monetary Fund (IMF).
The crypto-friendly Milei government announced its first cryptocurrency policy today (22). Diana Modino, the newly appointed Minister of Foreign Affairs and International Trade of Argentina, announced on the X platform that Argentina has approved and confirmed that Bitcoin and other cryptocurrencies can be used as a currency in commercial contracts.
Cointelegraph pointed out that the new Argentine government passed the “Argentina Economic Reconstruction Foundation” decree on December 20th. Although it did not specifically mention cryptocurrencies, it included provisions that allow debtors to choose currencies or goods other than the Argentine peso for payment, giving individuals the freedom to choose the type of currency.
It is worth mentioning that Mondino is one of the most outspoken Bitcoin supporters in the Argentine cabinet. According to DL News, Mondino stated in August, “Argentina can become a Bitcoin paradise.” She also announced at a Bitcoin conference in November that the Argentine government supports monetary freedom and will allow contracts to be signed using Bitcoin.
Now that Argentina has officially approved the use of Bitcoin in contracts, it is expected that the country will take the first step towards wider adoption of cryptocurrencies.
In fact, Argentina has been suffering from severe inflation for many years. The CPI report for Argentina in November showed a cumulative inflation rate of 148.2% for the year, with a monthly increase of 112.8%. This has caused great suffering for the Argentine people, leading to a large-scale shift towards using US dollars and cryptocurrencies such as Bitcoin.
According to a report released by Chainalysis in October this year, Argentina ranks 15th in the world in terms of cryptocurrency adoption, and its cryptocurrency trading volume is leading in Latin America. The estimated trading volume in the country during the 12-month period ending on July 1st reached $85.4 billion.
To solve the problem of high inflation, Javier Milei, known as the “Argentine Trump,” pledged during his campaign to take extreme measures to save the economy, including abandoning the peso and adopting the US dollar as the official currency. After taking office, he stated that he was in discussions with the International Monetary Fund (IMF) regarding Argentina’s fiscal adjustment plan and monetary policy.
The crypto community is also speculating whether Argentina has the potential to become the next El Salvador by legislating Bitcoin as its official currency. However, Milei has not publicly discussed his support for Bitcoin or other cryptocurrencies or his willingness to make them legal tender since taking office. It is also worth noting that the loan agreement between Argentina and the IMF includes a clause that restricts the use of cryptocurrencies, which may be one of the reasons why the Milei government has not aggressively promoted cryptocurrency support policies.
Related Reports:
“Bitcoin Fanatic” Becomes President of Argentina, Who Once Vowed to Blow Up the Central Bank
Will Milei, Who Advocates Closing the Central Bank and “Embracing Bitcoin,” Become the Next President of Argentina?
Ark Investment: Argentina, with Severe Inflation, Has a Higher Adoption Rate of Bitcoin Than El Salvador
45 Million People Have Access to Bitcoin, Will Argentina Become the Next El Salvador?