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Argentine peso plunges, Venezuela and Russia to develop SWIFT alternative, Bitcoin mining still paused in Venezuela – Bitcoin News
Welcome to Latam Insights, a compendium of the most relevant crypto and economic development news from Latin America over the past week. In this edition: the Argentine peso plunges against the US dollar, Venezuela and Russia agree to develop a joint SWIFT alternative, and Bitcoin mining remains suspended in Venezuela.
Argentine peso plunges 10% against the dollar
The Argentine peso has lost more than 10% against the US dollar in the past week, from less than 400 pesos per dollar in the informal blue exchange rate to more than 440 on April 21. The reason for this sudden rise has to do with the perceived weakness of the Argentine government, which has been unable to control the rise in inflation, which reached year-on-year levels of more than 100% in March, the highest in all of Latam.
The country currently has $2 billion in foreign exchange reserves, a low figure compared to the reserves of Brazil, an economy five times the size of Argentina, which holds approximately $350 billion in foreign currency. This has prompted Argentines to buy dollars to seek refuge from the devaluation of the peso, with analysts predicting the price to reach levels above 500 pesos per dollar later this year.
Venezuela and Russia plan to develop a SWIFT alternative
Venezuela and Russia announced that they are working to develop an alternative to SWIFT, the bank messaging and settlement system that most banks use to make cross-border payments. Accompanied by his Russian counterpart Sergey Lavrov, who also visited Brazil on his Latam tour, Venezuelan Foreign Minister Yvan Gil stated that such a system was already under development.
Gil stated:
The technical teams of the Central Bank of Venezuela and the Bank of Russia are working on the exchange of financial messages to move to a system where we free ourselves from the hegemonic dollar as the regulator of commercial transactions.
The system will be a response to the expulsion from the SWIFT network that Russian banks suffered in 2022 as a result of the broad package of sanctions adopted by Western nations against Russia. Gil stated that more updates on this system would be shared in the coming weeks.
Venezuelan Bitcoin mining farms remain inactive
The Bitcoin mining ecosystem in Venezuela remains inactive, with most farms not operating as a result of the so-called PDVSA crypto probe affecting the cryptocurrency sector in the country.
The mining halt, which was reportedly ordered by national power company Corpoelec, is still ongoing, with miners racking up losses reaching hundreds of thousands of dollars.
According to Criptonoticias, owners of these Bitcoin farms could lose $11 million monthly, while Corpoelec is losing around $2 million as a result of this forced pause. There are still no reports on when these operations can be restarted, as the probe is still ongoing.
What do you think about developments in Latin America this week? Tell us in the comments section below.
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