Cryptocurrency has evolved in frontier markets such as Argentina, where an unsteady financial system and decisive government intervention in the country’s economy have pushed many Argentines toward decentralized cryptocurrency.
The country’s national currency, the peso, is already highly volatile and subject to a raft of financial controls. As a result, the currency is increasingly demanding for everyday citizens. Amid this uncertainty, cryptocurrency has enjoyed a boon. Moreover, Argentines gained $1.86 billion in cryptocurrency in 2021.
A crypto enthusiast in Argentina wrote, “When you have restrictions, you need tools for freedom.”
In the 1990s, the financial system of Argentina was in alarming straits, with citizens finding their lifelong savings vanishing and with frozen personal bank accounts. However, the situation is still precarious, with Argentines of all income levels facing restrictions on transactions in foreign currencies. Long-standing mistrust of the government’s handling of the Argentine peso has also galvanized many Argentines to embrace Bitcoin. In one town in Patagonia, approximately 40% of businesses are ready to conduct payments in Bitcoin.
Furthermore, inflation’s year-on-year rate stands at more than 50%, a beginning figure where a depreciation peso continues to pinch most Argentine wallets. Still, cryptocurrency adoption has been uneven in Argentina, Just like elsewhere. Lastly, Argentina’s central bank has warned the public about a proliferation of cryptocurrency scams targeting users’ wallets. However, it hasn’t deterred most investors.