Soaring Bitcoin Demand in Argentina Amid Peso Devaluation
Summary:
With the sharp decline in the value of the Argentine peso, Argentinians are increasingly resorting to Bitcoin to protect their assets. Cryptocurrency exchange Lemon Cash reported a significant surge in Bitcoin purchases in recent weeks. Other exchanges like Ripio and Belo confirmed similar trends. Despite the rise in Bitcoin transactions, interest in stablecoins remains, with Argentinians using unofficial exchanges to purchase USD stablecoins to bypass financial restrictions. As cryptocurrency becomes more prevalent, an Argentine tenant in Rosario is now settling rental payments in Bitcoin.
As the value of the Argentine peso continues to drop, Argentinians are increasingly turning to Bitcoin as a way to preserve their savings. A report indicated that the South American nation has recently seen its highest demand for Bitcoin in nearly two years. In the week leading up to March 10, nearly 35,000 customers on the digital currency exchange platform, Lemon Cash, acquired Bitcoin. This represents a major increase in the weekly average compared to the year before.
The increased interest in Bitcoin corresponds directly with the dwindling value of the Argentine peso against the US dollar. This year alone, the peso's value has plunged by a factor of four. Such trends were not exclusive to Lemon Cash; other popular local cryptocurrency platforms including Ripio and Belo saw similar demand patterns.
Belo's CEO, Manuel Beaudroi, highlighted a shift in consumer behavior as excitement grew around Bitcoin's increase in value. He stated consumers were choosing Bitcoin over stablecoins as it offers more potential growth. However, he also acknowledged that stablecoins are often used primarily for transactional purposes such as making international payments.
Interestingly, even with rising Bitcoin demand, interest in stablecoins has not entirely evaporated. Reports suggest that Argentinians are purchasing USD stablecoins through unauthorized exchanges, or "crypto caves," to circumvent government currency controls and the Argentine peso's crippling inflation.
Digital currency use for everyday transactions is also gradually becoming more prevalent in Argentina. In December 2023, Diana Mondino, the minister of foreign affairs, international trade and worship, endorsed a decree that would regulate the use of Bitcoin and other cryptocurrencies within certain boundaries for economic reform purposes. This led to a rental agreement in Rosario, Argentina's third largest city, where a tenant would satisfy his monthly rent payment in Bitcoin.
Published At
3/23/2024 8:43:16 AM
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