Amid bearish conditions plaguing the global crypto industry, the Latin American economy of Argentina has been facing rabid inflation for upwards of 45 years now.
However, in what we hope will be a turnaround for both financial talking points, the country has recently instated pro-Bitcoin, right-wing libertarian Javier Milei as its next president.
Further, with such Buenos Aires-born, central bank-hater now in charge for the next four years, this article will be exploring what Argentinian crypto antics may unfold in times to come.
A Pro-Bitcoin President - Javier Milei
Officially of the ‘Freedom Advances’ party, Milei is undoubtedly one of the wackiest and eccentric politicians we’ve seen in years.
First and foremost - and when it comes to his financial prowess - Milei is a trained economist with two masters degrees, and has previously worked as the chief economist at a leading business conglomerate and HSBC. Additionally, he’s also authored books that outline his economic vision.
In succinctly symbolising his outlandish and polarising stance when it comes to politics and economics, the politician has been seen waving a chainsaw at multiple rallies - in a reference to his desire to cut state powers and interventions within the free market. In turn, one of his flagship policies is to shut-down the country’s central bank as part of ‘economic shock therapy,’ as well as 11 of its 19 ministries as part of a historical spending cut regime.
JUST IN: ???????? Argentina President Javier Milei confirms he will shut down the Central Bank. pic.twitter.com/MkHANrojKy— Watcher.Guru (@WatcherGuru) November 24, 2023
As of 2022, and after decades of booms and busts - Milei assumes the country’s presidential position as it experiences one of the most outrageous hyperinflation climates to date, with many economic data sources citing it to be around 140% as of today.
With this in mind, Milei is poised with the extremely arduous task of realising the country’s plethora of unmet potential - which in turn, would see it recapture some of the world dominance that it once had at the turn of the 19th century.
Now enough with the talking…to get a better glimpse into the mind of Javier Milei, simply watch the clip below:
this guy is just truly incredible pic.twitter.com/EhNmXMdZps— delian (@zebulgar) November 24, 2023
El Salvador’s Successor? - Bitcoin as a Legal Tender in Argentina
For many Bitcoin ($BTC) maxis out there, the first question to ask is whether Argentina’s new anti-centralisation president will be following in the footsteps of El Salvador’s Nayib Bukele… in making BTC a legal tender in the country that is.
Instated as legal tender in El Salvador in 2021, President Bukele made such revolutionary finance shift in a ploy to boost the country’s economy, foreign investment, and facilitate remittances (which equate to around 25% of the country’s GDP).
Further, despite programs to democratise DeFi to the El Salvadoran populace, only 14% of domestic businesses were found to have engaged in BTC transactions between September 2021 and July 2022… therefore meaning that after 3 years of activity, Bitcoin usage is still low in the country (and therefore relatively ineffective as of now).
That being said, rolling-out Bitcoin as legal tender in Argentina would be a completely different ball game…
First off, Bukele is accused of prematurely introducing BTC as a legal tender, as per reports, the country’s technological infrastructures couldn't support the move at the time. In hindsight, this meant that a smooth and effective BTC roll-out was never on the cards.
Additionally, the majority of such timeframe in question coincides with the ongoing crypto bear market…and as we all know by now, with endless FUD comes endless challenges (especially when deploying crypto as a literal macroeconomic solution).
Collectively, insufficient technology and bearish market conditions may be what’s holding El Salvador back when it comes to realising its full BTC-fuelled DeFi potential, which are things to consider if Milei was to ever introduce the cryptocurrency as a legal tender in Argentina.
Crypto Affairs in Argentina (As of Today)
Rather bullishly - however also as a result of its abysmal TradFi state - crypto adoption in Argentina is said to be fourth across global rankings (per Statista), with only Turkey, Brazil, and Columbia bettering it.
As intuition suggests, such demand for crypto solutions likely stems from the desire to seek refuge in stablecoins (such as USDC or USDT) - as well as Bitcoin and other altcoins - instead of storing savings as increasingly-worthless Argentinian Pesos.
In turn, the country’s relatively high crypto adoption rate suggests that its infrastructures for mass adoption may be there…or at least better than those of El Salvador.
Crypto & President Milei
However seeds must be sowed and cultivated in order for crops to grow, meaning Milei’s likelihood to manifest a DeFi-fuelled Argentina depends on many factors.
On the grand scale of BTC matters, the coin pumped beyond $37,000 in wake of him being elected. Although hard to prove, this may be because the politician has made his pro-Bitcoin stance public, by describing the OG cryptocurrency as ‘a means of returning monetary control to the private sector’.
Additionally, Milei also prefers BTC over more conventional assets like gold or silver.
On the flip side of things - and in a rhetoric that’s hard to prove or disprove as of now - many are accusing Milei’s pro-Bitcoin stance as being nothing but a ploy to appeal to younger voters (as well as those of the tech-savvy accord). If true, it’s quite-likely that we’ll never see a crypto revolution in the region during his 4-year reign.
Perhaps even more concerning, Milei was also involved in the ponzi scheme of CoinX ($CNX), which further insinuates that the economist isn’t as crypto savvy as we may think.
With these deterring factors in mind, it’s logical to assume that a relentless BTC revolution in the country won’t happen any time soon…however given that its new leader is a passionate opposer of centralised powers, less-significant DeFi inroads could be made across the flailing economy in years to come.
Additionally, the country has reportedly borrowed $45 billion from the IMF, which comes with the stipulation that Argentine banks won’t deal with crypto matters…however if Milei was to put an end to its central bank (as planned), such deal could possibly become redundant.
In conclusion then, whilst a full-on BTC revolution in the region looks unlikely, Argentina’s new anti-establishment and pro-private-sector president may inadvertently usher-in a wealth of new crypto-bullish opportunities in the country…meaning solely on the crypto front, our hope is far from lost when it comes to Javier Milei!
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This article is intended for educational purposes and is not financial advice.