In recent months the interest of the Argentinian population in crypto assets has been increasing. One of the main reasons is the high inflation rate of around 50%. Prices in the country rose 6.7% in March, reaching an annual average of 55.1%, according to an article published by Exame, and almost half of the people go hungry. In addition, the peso, the local currency, is constantly devaluing.
This scenario brings favorable conditions for adopting crypto assets, either to preserve capital from inflation or to circumvent exchange rate fluctuations. In Patagonia, for example, about 40% of stores already accept bitcoin as means of payment.
Argentina has even taken the lead in a ranking of 150 countries with employees paid with crypto assets. This was possible because of a loophole in local legislation that allows companies to pay up to 20% of salaries in crypto.
Payments with crypto assets in Argentina jumped 340% in 12 months
The information comes from Bloomberg News, which in March this year showed the growing interest of Argentines in crypto asset payments over the past 12 months. According to the report, there is a clear advantage for workers that receive in crypto
As an example, if a professional receives the equivalent of US$ 1000 through the traditional banking system, this will result, at the exchange rate, in about 109,000 pesos. If he gets the same amount in crypto, the conversion rate will result in 200,000 pesos, which represents a difference of 83%.
Bu the way, at the request of the workers themselves, some companies have been breaking the rule of paying only up to 20% in crypto, precisely because people want to preserve their purchasing power.
Argentina wants to regulate the use of crypto assets
However, this issue has been worrying the country’s Central Bank, which has already warned the population about the risks associated with crypto assets. In March, the Argentine Senate made an agreement with the IMF, including a clause that discourages the use of crypto assets in Argentina.
Entitled “Strengthening financial resilience”, the clause states that “to further protect financial stability, we are adopting measures to discourage the use of crypto assets to prevent money laundering, informality, and lack of mediation”.
Around a month later, in April, Argentina’s Internal Revenue Service suggested that there needs to be increased oversight of crypto assets on a global scale. The body’s president, Mercedes Marcó del Pont, said that the OECD should include digital currencies in its financial reports. According to her, global regulation can prevent crypto assets from becoming facilitating instruments for evasion or fraud.
Amidst debates about the Argentine population’s increased use of crypto assets, the country’s largest private bank, Galicia, has confirmed that it will accept the purchase and sale of digital currencies such as bitcoin (BTC), ether (ETH), USDC, and XRP on its platform.
Crypto assets Mining in Argentina
With Argentinians’ growing interest in crypto assets, the country is attracting organizations interested in mining, such as British FMI Minecraft Management, which announced that it will invest US$45 million in a local mining hub in the Zapala region, where there are tax incentives.
The facility will have 30 thousand mining equipment, which should mine between 30 and 50 bitcoins per day. The energy used for the activity will come from natural gas from the Campos de Vaca Muerta region, reducing the country’s carbon emissions and electricity costs.