Accumulated inflation of 80.2% in 2023 in Argentina: More and more Argentines are dollarizing using stablecoins
A few days ago the National Institute of Statistics and Censuses (Indec) confirmed what the market had been suspecting, with a new rise in the Consumer Price Index (CPI) that reached 12.4% in August, the highest since February 1991.
The figure was almost double the 6.3% increase that had been recorded in July and exceeded expectations that projected an increase of 11.8%.
With this result, the CPI accumulated an increase of 80.2% so far this year and 124.4% in the last twelve months. Faced with this scenario, thousands of Argentines have had to resort to different options to protect their money from inflation and thus not lose purchasing power.
Guillermo Escudero, Regional Manager and Market Analyst at CryptoMarket in Argentina, explains that cryptocurrencies, specifically stablecoins or stable cryptos such as USDT and USDC, have become one of the most searched terms on the web because the Argentine is looking for alternatives to protect the value of your money and thanks to the 1:1 parity with the dollar price that these digital currencies have, more and more people are turning to this option.
According to the data provided by the Latin American exchange, in this month of August post-PASO elections there was an increase in transactions from Argentine accounts of 52% compared to the previous month. The increase is mostly due to the purchase of stablecoins.
But also, the executive clarifies, “currently the market offers stablecoins backed by dollars, euros, gold and even some issued by Latin American countries.
The most used by Argentines on our platform is USDT as the first option and then followed by USDC, DAI, TUSD and recently also EURS, which are cryptocurrencies that have 1:1 parity with their fiat equivalent, the North American dollar and the euro. respectively,” he explains.
Escudero adds that one of the main attributes of stablecoins is that they are centralized projects, they have partnerships and are even audited by regulatory entities and banks where they maintain custody of the money.
“Except for the case of DAI, which is backed by a basket of other cryptocurrencies, including USDC and ETH, among others, the rest are projects that have physical dollars in banks, causing this currency to have the same logic of having digital dollars in your bank account,” he says.
And beyond this, “the main benefit of owning these cryptocurrencies is the ease of sending globally and without borders, which does not happen with money in the bank account, which usually has greater complexity in international movements, as well as also higher costs, possible tax withholdings and another speed of accreditation,” says Escudero.
From Bitwage – the pioneering platform for payment of fees in cryptocurrencies and digital dollars most chosen by service exporters – they comment on how the number of Argentine users has accelerated in recent times seeking to work abroad and earn in dollars through the platform.
“In the month of June we saw a 65% increase in new Argentine users and it has remained at that volume during July, while in August we had a peak again. It is notable that although they can choose to charge in various currencies, the Argentine – the vast majority – chooses to do so in digital dollars, unlike the American user who prefers bitcoin,” comments Ramiro Raposo, VP of Growth at Bitwage.