Argentines are switching to Bitcoin (BTC) amid inflation and economic decline.
The number of active cryptocurrency accounts has increased tenfold since last year in Argentina, according to the head of Binance in Latin America.
The popularity of Bitcoin and other cryptocurrencies is skyrocketing in Argentina, as local residents look for new ways to offset inflation, the global news agency reported. AFP News today.
“The number of user accounts to invest in cryptocurrencies has multiplied by ten in Argentina since 2020,” Maximiliano Hinz, Latin American director of Binance cryptography, told the agency.
A flight from inflation
According to the report, the value of Argentina’s sovereign currency – the peso – is practically deflating with each passing day, as inflation has averaged 45% over the past three years. In addition, the country’s GDP decreased by around 10% in 2020, while the economy has been in recession since 2018.
Historically, Argentines have invested their money in US dollars to try to compensate for inflation, but even that method has become unviable lately.
In addition to the extremely low interest rates at local banks, the government also imposed a strict purchase limit of $ 200 per month for local residents.
Given that, cryptocurrencies have become an obvious solution to Argentina’s economic problems. According to Hinz, there are now about two million registered commercial accounts in the country, with a total population of 45 million.
“It is no accident that Argentina and Venezuela, countries with high inflation, are the main cryptographic hubs in South America”, Noted digital assets specialist Marcos Zocaro, adding:
“I have older customers who used to be afraid to make a fixed deposit at a bank, but are buying cryptocurrencies without fear of risk.”
Adoption is growing rapidly
In this atmosphere of uncertainty, cryptocurrency exchanges “have evolved to create bridges for an audience without financial education”Said Sebastian Valdecantos, founder of the Argentine online credit system Moneda PAR.
At the same time, Argentines are increasingly turning to cryptocurrencies as a means of payment, since everything – from cars to second-hand clothes – can be bought and sold by digital assets in the country.
Last week, local e-commerce giant Mercado Libre also announced that it will allow Bitcoin payments for real estate – in a sector that was once dominated by the U.S. dollar.
Argentina’s Central Bank (the one with 50% annual inflation) is requesting banks to complete a sheet to identify clients known to have, trade or do payments with cryptoassets.
– Franco Amati 🦔🌎⚡🟩 (@franamati) April 2, 2021
As reported by CryptoSlate, the Central Bank of Argentina started asking citizens to reveal their Bitcoin holdings last month.