Argentina looked to crypto when the crisis occurred after market time
Argentina’s economy minister, Martín Guzmán, resigned on Saturday, and with the country’s markets closed at the weekend, stack coins were the first resource to reflect how the political uprising would affect the economy.
When Guzmán twitret As he left office, concerns about how his departure would affect Argentina’s finances were immediate: the price of US dollar-denominated cryptocurrencies, known as stack coins, skyrocketed in response to speculation about the fate of the Argentine peso.
Due to years of economic turmoil, Argentina carefully regulates the exchange rate of its national currency, including when it can be traded publicly. Because Guzmán’s resignation came over the weekend, speculation ran rampant during the 39 hours between his departure and the opening of foreign exchange markets on Monday.
Cryptocurrency exchanges were meanwhile open for business. As a result, economists, journalists and traders who spoke to The rest of the world said stablecoins was the only clear proxy for users to monitor the peso in real time. Meanwhile, some traders seemed to beat what they expected to be a devaluation on Monday morning by changing the pesos to “dólar cripto”, as stablecoins are locally known.
Crypto is located in a legal gray area in Argentina, so the measurements of adoption vary a lot, but Chainalysis’ Global Crypto Adoption Index ranks the country among the 10 best crypto adopters worldwide.
Alberto Guerrero Montilla, 34, works as a business development specialist for a blockchain-as-a-service startup called SenseiNode. When he found out about Guzmán’s resignation, he opened CoinMonitor, a cryptocurrency, and saw the decline of the peso against the stablecoin exchange rate in real time. Just before the announcement, the value of one USDT (Tether stablecoin) was 240 pesos. So, “I saw it jump to 253, then 258, then 261, some even to 270” in a matter of hours, he said. The rest of the world. Some exchange platforms, such as Lemon Cash, peaked at 300.
“We saw stablecoin operations triple over the weekend,” said Juan José Méndez, brand manager at Ripio, a digital wallet with more than 1.5 million users in Argentina. The rest of the world. For Nicolás Pertierra, an economist at the Scalabrini Ortiz Center for Economic and Social Studies, a local socio-economic research center, the peso-stablecoin course “served as a thermometer that helped economists measure what they could expect.”
When The rest of the world Talking to Argentine traders, experts and crypto exchange executives on Wednesday, the value of a black market dollar had risen to around 250 pesos – far from a crash. exchange had speculated on Sunday morning. Nevertheless, this first crypto-led currency run meant that for over 24 hours, between Saturday afternoon and Sunday evening, some users paid too much for dólar cripto stablecoins in pesos.
Paying 300 pesos for one dollar of crypto was absurd “especially when the market is still closed.”
Last Friday, 27-year-old Juliana – who spoke on condition of anonymity due to crypto’s unregulated legal status in Argentina – planned to buy US dollars with her monthly salary from working as a developer, but she did not make it in time before the official the foreign exchange market closed. On Saturday, she hurried to buy Ethereum through the Binance crypto exchange, something she had done, in small quantities, a few times before. “When I saw the situation, I decided to buy crypto,” she said The rest of the world.
The rush to buy stack coins is not new in Argentina. After the 2019 election favored the current left-wing president, Alberto Fernández, the team at Ripio saw a marked increase in cryptocurrencies. There were even more transactions then than last weekend, Méndez said. The difference this time, however, was about timing, as crypto led the price trends over the weekend.
This is a trend that many are worried about going forward. An anonymous official of the Ministry of Finance, who asked for their statement to be kept anonymous in the midst of the institution’s crisis, said The rest of the world that despite their name, stablecoins are unstable. Paying 300 pesos for one dollar of crypto was absurd, the official said, “especially when the market is still closed.”
Elías, 29, works for a local bank and is a crypto user. Nevertheless, he considers it foolish to have bought cryptocurrency during the weekend panic. Those who bought stack coins for overpriced peso rates “traded out of fear and uncertainty,” he said. The rest of the world. “A friend called me and asked what she should do,” he remembered, “I said, ‘Stay calm.'”
