Argentina has been plagued by high inflation and has for many years seemed to lurch from one financial crisis to the next. Independent economists currently place inflation at around 25%, a figure that the government has denied.
The continuation of the so-called “Argentine paradox” – advance development followed by decline – has led most recently to tight government controls over purchases of commodities and foreign currency, notably the US dollar, which many Argentineans use to safeguard their income amid the continual decline of their Argentinean peso.
In spite of recent relaxations enabling locals to buy up to $2,000 per month, albeit provided they earn at least 7,200 pesos per month and pay a 20% cash purchase tax, many have taken to purchasing dollars on the black market. The black market has continued to flourish at a rate of around 12 pesos to the dollar compared with the official rate of 8.
Now, however, Bitcoin is making major inroads in Argentina, with Buenos Aires sporting the highest number of BTC-accepting locations on the American continent, even more than New York, reports medium.com.
While awareness of Bitcoin is still relatively low, as is the case in most countries, the benefits of Bitcoin could soon be discovered by more and more Argentineans, providing a kind of currency haven, especially given the government’s inability to control it and its being non-inflationary by design.
Medium.com describes “several sites which act as dealers (see digicoins.tk, unisend.com, localbitcoins.com/country/AR and the lively Bitcoin Argentina Facebook group 4000 members strong)” as being the current main contributors to the market and which also publish daily xchange rates.
A video posted to YouTube by bitcoinfilm.org even depicts how buyers meet sellers in public locations in order to swap pesos for Bitcoin, similarly to how the black market for dollars has operated in recent years.
As Reddit users point out, there is as yet no significant evidence of the Bitcoin market eclipsing the dollar market, despite the proliferation of bricks-and-mortar outlets for Bitcoin in the Argentine capital.
Some believe that if citizens come to treat Bitcoin as a protocol rather than a currency, and increase their purchasing power as a result, the tide may very well turn.