The governor of Argentina’s central bank hosted a G-20 meeting in Buenos Aires earlier this year, where he ambitiously set a summer deadline for arriving at a solution regarding the global regulation of cryptocurrency.
But Argentina’s push towards regulating cryptocurrency is not a sign of the nation’s disapproval of the technology. On the contrary, Argentina could make claims to being the South American leader when it comes to cryptocurrency.
A recent history of financial instability and economic inflation has seen Argentinians rush into the blockchain world. Now, there are thousands of crypto-ATM’s popping up all over the country, cryptocurrency courses are being taught in universities, and the large-scale adoption of cryptocurrency is advancing at a rate far beyond that witnessed in the northern hemisphere.
In 2014, publications like The Economist were deriding cryptocurrency’s failure to take hold in Latin America, specifically Argentina, at a time when many of the continent’s economies were fluctuating.
A year later and the New York Times was picking up on the moves being made in Argentina by crypto firms. Fast forward three years and those who were doubting crypto’s ability to take hold in Argentina have now been proved wrong.
Argentina was one of the strongest economies in the world at the turn of the 20th century. But the next hundred years were marked by political instability, foreign interference, and an eventual inflation rate which reached 20,000% in 1990.
Today that rate hovers at around 30%, with banks instigating 40% interest rates to try and keep the Peso from crumbling.
Incentivizing citizens to save their Pesos is a hard sell since most Argentinians buy dollars and save those instead. An estimated $50 billion in American dollars is thought to be hidden in wall panels and underneath mattresses all across the country.
The stage is set
Economic instability is not a prerequisite for cryptocurrency adoption – one only has to look across the other side of the globe to Japan for evidence of that.
But Argentina’s economic predicament could only have sped up the process, rapidly taking the country to its position today as one of the continental leaders in terms of crypto adoption.
In October of 2017 a total of 200 cryptocurrency ATMs were installed in various urban locations throughout the country. The scheme was such a success that a further 4,000 machines have been scheduled for installation, with cooperation from the nation’s central bank.
While dollars may still be the preferred store of value, much of the money that was previously consigned to the mattress or the wall panel is now being stored in crypto wallets.
In April, Buenos Aires was host to ‘Bitcoin Day’ – a gathering of crypto enthusiasts from across the country who came together to discuss the possible routes that cryptocurrency could take.
Just last month the Costaflores Organic Vineyard in Lujan de Cuyo, Mendoza enacted an initiative to load all of their wine onto the blockchain while tokenizing individual bottles and opening up their business details to the transparency of the distributed ledger.
Meanwhile, community groups like this Facebook page are quickly growing hubs for local cryptocurrency traders looking to keep up with the latest price movements.
As the Argentinian people move more and more money out of the country in a bid to secure their savings, the Banco Masvendas bank has opened up a crypto-based currency exchange. Customers can benefit from reduced fees compared to international SWIFT payments, with their funds being converted to Bitcoin, and then converted again into the user’s chosen currency.
Measures like this will be good for crypto adoption in Argentina, but it doesn’t do anything for the strength of the Argentine Peso, which continues to sink.
Watch this space.