von • Argentina is importing banknotes from Paris and Malta due to the growing demand from its central bank.
• Bitcoin’s popularity in the country is increasing, with record high prices against the Argentine Peso.
• The government is attempting to regulate cryptocurrency, such as implementing proof-of-solvency procedures for exchanges and custodians and offering tax benefits for citizens who declare their crypto holdings.
Inflation Prompts Banknote Imports
Argentina’s Casa de la Moneda is struggling to keep up with the demand from its central bank, prompting it to import 1,160 pallets of 1,000-peso denomination banknotes from Paris and Malta. Inflation in the country has reached a record 7.7% in March, causing Argentinians to turn to bitcoin as a potential safe haven asset.
Central Bank Responding With Rate Increases
The central bank has responded by raising its rate by 300 basis points to 81%, while also restricting access to dollars for certain business payments. This has caused the black market rate for the US dollar to reach 460 ARS on April 24 – more than double the official rate of 220 ARS.
Regulation of Cryptocurrency Growing
The government is attempting to regulate cryptocurrencies, such as implementing proof-of-solvency procedures for exchanges and custodians and working on requirements and rules for crypto companies. They have also proposed a bill offering tax benefits for citizens who declare their crypto holdings. Lastly, an Argentine province announced its intention to issue a dollar-backed stablecoin in December 2022.
Bitcoin Reaching Record High Prices
The persistent inflation in Argentina has caused bitcoin prices against the Argentine Peso (ARS) reach a record high on April 25th despite a 9% correction afterwards – currently standing at around 6 million ARS representing a significant increase of more than 100% YTD since January 2021. Stablecoins are also increasing in popularity among locals with 50% of them reported as being used by citizens from Argentina according to recent reports .
Conclusion
As cryptocurrency adoption continues growing rapidly within Argentina ,the government is attempting regulating it using different means such as introducing proof-of-solvency procedures for exchanges or offering tax benefits for declaring crypto holdings . At the same time , Bitcoin soars reaching new heights against ARS currency while stablecoins gain popularity among locals making them another viable option when dealing with economic challenges that affect Argentinians daily lives .
