Amid a worsening economic crisis and political uncertainty, Argentines are increasingly adopting cryptocurrencies, particularly stablecoins and Bitcoin, to hedge against the rapid devaluation of the peso. The local currency has fallen by over 4% against the U.S. dollar since the start of October, according to Google Finance data, despite government efforts to stabilize it ahead of the October 26 legislative elections.
President Javier Milei's administration has managed to reduce inflation from nearly 300% to around 30%, but concerns persist over further peso devaluation and shrinking central bank reserves. In response, many Argentines are employing a strategy known as "rulo," which involves converting dollars into stablecoins and reselling them for pesos on the parallel exchange market, where the currency trades nearly 7% lower than the official rate. This arbitrage method can yield returns of up to 4% per transaction.
The adoption surge has been accelerated by recent capital controls. Starting October 1, Argentina's central bank barred individuals from reselling dollars for 90 days, leading to a 40% increase in stablecoin-to-peso transactions on platforms like Ripio within a week. Similarly, Lemon Cash reported a over 50% jump in total crypto transactions above average. Julián Colombo, Argentina country manager at Bitso, noted that stablecoins serve as a "vehicle to get cheaper dollars," adding that the lack of comprehensive crypto regulation has allowed this practice to flourish.
With the midterm elections approaching, locals fear that a poor performance by Milei's bloc could trigger further peso declines, forcing the government to devalue the currency to bolster reserves. Throughout October, the central bank sold significant amounts of dollars, including an estimated $1.3 billion over one week, to prevent the peso from breaching its trading band. Nicole Connor, leader of Argentina's Women in Crypto organization, emphasized the conservative approach: "Inflation and political uncertainty make us more conservative, so I don't have any savings or investments in pesos, I only use them for expenses."
This trend is part of a broader global pattern in emerging markets, where cryptocurrencies are evolving from speculative assets into essential tools for financial inclusion. Argentina's pro-crypto stance under Milei has facilitated this shift, with platforms like Coinbase and Binance receiving licenses to operate, and foreign crypto products being allowed into the local market. As one local stockbroker stated, "Stablecoins are here to stay," highlighting their role as a refuge from national currency volatility.
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