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Argentinians 'don’t want to get poor’, stablecoin use surges on economy fears

By Monte Stewart


Crowds at the traditional San Telmo Market in Buenos Aires, Argentina.
Argentinians continue to veer towards cryptocurrencies despite the problems of the terra blockchain's troubles that led to price declines. - Photo: Shutterstocks

Argentina’s push away from the peso toward cryptocurrencies has picked up speed – at least temporarily – after the country’s economy minister quit.

Martin Guzman’s resignation on Sunday appeared to cause a spike in tether (USDT), a stablecoin pegged to the US dollar, over the weekend.

Argentina’s economy minister role is similar to that of a finance minister.

Argentinians 'don't want to get poor'

Tether spiked on multiple cryptocurrency exchanges in Argentina, including Binance and Lemon Cash, according to Crypto Potato.

According to one digital fund manager the explanation for this latest expansion of the Argentinian crypto sector was simple: in Argentina people:"don’t want to get poor".

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Terra’s troubles not a factor

Argentinians continue to veer towards crypto despite the Terra blockchain’s troubles, which caused the original luna coin and terraUSD stablecoin to collapse.

The weekend spike in tether also occurred even though troubled crypto lender Voyager Digital froze deposits, withdrawals and rewards, and hedge fund Three Arrows was reprimanded by the Monetary Authority of Singapore (MAS) and the company filed for US bankruptcy protection.

Argentina is showing strong demand for cryptocurrency despite apparent federal efforts to limit its use.

In May, Argentina’s central bank (BCRA) prohibited banks from offering cryptocurrency services that are not regulated by it. The move came shortly after one bank, Banco Galicia, launched a service trading bitcoin (BTC), ether, which is the coin backed by the Ethereum blockchain, USDC, and Ripple (XRP).

Banco Galicia was the first lender in the country to offer digital asset trading services. Many Argentines living in Buenos Aires and elsewhere are investing in crypto as a hedge against skyrocketing inflation, which is above 60%.


Argentina’s third hyperinflation era 

Andrew Durgee, head of Republic Crypto, the asset management arm of Republic and its Republic Crypto Fund, told that Argentinians “have a real use case for crypto” and use it to fight poverty.

Durgee recalled a conversation with an Argentinian politician whom he did not identify.

“I had dinner with him in Montevideo and he told me at the time, ‘Andrew, America just doesn’t understand where I’m about to live through my third hyperinflation [era] in Argentina, and there’s just nothing I can do about it,’ ” said Durgee.

“Americans are into [the] blockchain and crypto because they want to get rich. means of fighting poverty. In Argentina … we just don’t want to get poor.’


0.15 Price
+0.400% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872


3,107.53 Price
+0.990% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00


64,868.75 Price
+2.050% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00


0.50 Price
-0.840% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

“And, that was a really powerful thing to hear, and emotional, coming from him at the time. And he said, ‘Listen, if I can’t have any influence or control over the economic scenario of this country, and I’m actually involved in it at the political level every day, how does a regular person feel?’ ”


Pessimism dates to 2001

Pessimism about the peso dates back to 2001, when systematic economic mismanagement led to the Latin American country defaulting on $80bn of sovereign debt, and being locked out of the global capital markets until 2016.

In 2010, the Argentine government nationalized global energy giant Repsol’s entire gas operation in the country. Also, in 2008 during the global financial crisis, the government nationalized the nation’s $30bn pension system.

State has record of seizing assets  

President Cristina Fernandez de Kirchner said the move was designed to protect retirees during the global economic meltdown.

But her political opponents claimed that she was scrambling for cash to prop up tax revenue.

Fernandez now serves as vice-president and she clashed with the former economy minister Guzman, prompting him to resign, Reuters reported. Fernandez de Kirchner had called for more government spending to offset higher poverty levels. Guzman has since been replaced.


Governments fight rising prices

Recently, governments around the world have taken steps to curb inflation sparked by Russia’s invasion of Ukraine and the conflict’s impact on global energy prices.

On Tuesday, the Australian government is expected to introduce an interest-rate hike that aims to reduce inflation. The US and Canada have also implemented hike at rates not seen for decades.

Last week, the UK government served notice that it plans to take on rising prices, and the Iranian government indicated that it will reduce oil exports to tame energy inflation.

In addition, US Federal Reserve chief Jerome Powell said central banks are starting to understand how little they know about inflation.

But more Argentinians know how much they like cryptocurrency.

Markets in this article

Ripple / USD
0.50443 USD
-0.00422 -0.840%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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