Capital Controls: A Drastic Move
Argentina’s recent financial maneuverings have left many scratching their heads while simultaneously reaching for their Bitcoin wallets. Just as voters ushered in a new president, the Central Bank of Argentina (BCRA) decided to significantly slash the amount of U.S. dollars a saver could buy each month from a staggering $10,000 down to a mere $200. That’s a whopping 98% reduction!
The Central Bank’s Justification
In an effort to protect its dwindling reserves, the Central Bank claimed that this is a “temporary” measure intended to last until December 2019. However, considering the country’s inflation rate has rocketed above 50% this year, many are understandably skeptical of the term “temporary.” As per the bank’s proclamation, the limits are distinct: $200 for those with a bank account and a paltry $100 in cash purchases. Not exactly generous, is it?
Bitcoin Trading Boom
As the peso continues its downward spiral, Argentinians have started turning to cryptocurrency as a hedge against inflation and currency controls. According to data from Coin Dance, in the week ending October 26, locals traded an impressive 14.15 million ARS (approximately $240,000) on the P2P platform Localbitcoins. While the total volume in Bitcoin wasn’t off the charts, it’s safe to say that the appeal of digital currency is on the rise as the local fiat struggles.
Crypto Commentary: Words of Wisdom
The online Bitcoin community didn’t hesitate to weigh in on these developments, with one analyst quipping, “It’s not your money if you need permission to use it.” Well said! The sentiment resonates especially in light of previous administrations that had shown an interest in embracing Bitcoin. For instance, former President Mauricio Macri previously discussed adopting Bitcoin as the nation’s currency, depending on its performance against the peso. Talk about irony!
A Wider Trend?
Argentina’s financial dilemma is not an isolated incident. Just last week, Lebanon faced its own banking crisis, prompting similar reactions in the Bitcoin community. With capital controls appearing to be set on a global scale, many are speculating whether this trend will lead to larger adoption of cryptocurrencies as safe-haven assets.
