Forbes: Argentines choose USDT over pesos to save savings
Date: 2024-07-09 Author: Oliver Abernathy Categories: IN WORLD
The inflation situation in Argentina has reached a critical point, with an annual inflation rate of 276%. This forced residents of the country to look for alternative ways to preserve their savings, avoiding the national currency, the peso. According to Forbes, despite the economic crisis, Argentina has the highest rate of cryptocurrency adoption in the Western Hemisphere.
Transition from dollar to stablecoins
Traditionally, Argentines bought US dollars on the black market through illegal exchanges known as cuevas. However, this method had many disadvantages:
- Exchangers often offered an inflated rate, sometimes twice the official rate.
- High risk of robbery during exchange.
- Possibility of purchasing counterfeit dollars.
With the rise of cryptocurrencies, many Argentines have begun to favor digital assets such as the stablecoin Tether (USDT) instead of pesos or US dollars. According to Forbes, of the 130 million visitors to 55 crypto exchanges, about 2.5 million were from Argentina, indicating a high level of cryptocurrency adoption in the country.
Argentines avoid memcoins and altcoins, preferring the stability of USDT. Maximiliano Hinz, head of Latin America exchange Bitget, said: “Argentina is an anomalous market where many people buy USDT and leave no room for anything else. We haven't seen anything like this anywhere. Argentines simply buy USDT and do nothing with it.”
Risks and regulatory issues
Despite the popularity of stablecoins, their purchase carries certain risks due to the lack of clear regulatory rules. Argentines often use crypto exchanges such as Binance, eToro, BingX, HTX and Bitget, which are not among the top 20 most trusted platforms according to Forbes and are not registered with Argentina's national securities regulator (CNV).
In addition, local firms such as Lemon and Buenbit offer services for buying and selling cryptocurrencies through prepaid cards, but also do not have all the necessary permits.
In March 2024, CNV announced the creation of a Register of Virtual Asset Service Providers (PSAV) to identify individuals and entities providing services related to crypto assets. However, after more than three months, none of the 55 firms operating in Argentina have been registered.
Policy changes
In November 2023, Bitcoin supporter Javier Miley became President of Argentina. Under his leadership, the country abolished the need to declare digital assets, which led to a new record for the exchange rate of Bitcoin against the peso.
In conditions of high inflation and economic instability, Argentines are actively looking for ways to preserve their savings. The move to stablecoins such as USDT has become a major strategy, despite the risks involved and the lack of clear regulation. The Argentine government and regulators continue to develop new measures to adapt to the rapidly changing financial landscape.
