Argentines embrace crypto after the finance minister resigned

The South American country has been fighting high inflation and monetary instability for decades. Its problems seem to have intensified since yesterday (July 3), the Minister of Economy – Martin Guzman – resigned.

In the midst of this economic turmoil and in order to preserve their wealth, the Argentines showed greater interest in stable coins. Several cryptocurrency exchanges, including Binance and Lemon Cash, reported that the cost of buying Tether (USDT) using Argentine pesos (ARS) increased significantly.

Crypto may be the answer

One of the largest countries in South America and a former economic giant – Argentina – has not been in its best shape in recent years. While the nation during the first three decades of the 20th century was among the 10 richest states per capita across the globe, things look quite different over the last 40 years.

Inefficient production, dictatorship regimes and huge foreign debt caused galloping inflation. In fact, Argentina has not had a single-digit inflation rate for at least a decade. The global economic turmoil caused by the COVID-19 pandemic, the military conflicts and the energy crisis have logically made things worse.

In 2019, the government appointed Martin Guzman Minister of Economic Affairs. During his reign, he managed to reduce Argentina’s public foreign debt while residents who struggled received much-needed bonuses and food stamps.

In May, however, the inflation rate in the country rose to over 60%. At the same time, the lack of diesel and pressure from the left political wings led to Guzman’s resignation yesterday.

Somewhat unexpectedly, some Argentines shifted their focus to crypto, and more specifically, stable currencies pegged to the US dollar due to the falling national currency. Data from CryptoYa revealed that the price of Tether (USDT) measured in ARS increased on a number of exchanges. The cost to buy the product at Binance is around 270 ARS, while the price of Lemon Cash is almost 295 ARS.

It is worth noting that Argentina is among the countries with the highest adoption rate for cryptocurrency. According to a Chainalysis survey, the nation ranked 10th, surpassing China, Brazil, South Africa and Russia.

Turks also approached the USDT

Another country that is fighting high inflation is Turkey. The national currency crashed significantly against the dollar last year, and months later it is still unable to restore its previous levels. To overcome the problems and preserve their savings, the Turks turned to Bitcoin and Tether. Since it is tied 1: 1 to the USD, the latter allows people to buy the nearest available option of the dollar, but on the blockchain.

It would sound more logical that the local population would first turn to gold as it is the country’s most important and most used investment instrument before dealing with crypto. Not long ago, however, the government urged the population to hand over their precious metal stocks to support the economy.