The Argentine peso loses value and cryptocurrencies gain followers



Despite the volatility it has experienced in recent months, Bitcoin is a stronger option than the Argentine peso as a store of value, for several key reasons.

While it is not a perfect solution and carries risks of its own, its decentralized nature, scarcity, portability, and medium-long-term resistance to inflation make it an attractive alternative to the Argentine peso as a store of value in a context of prolonged economic mismanagement.

But also, in the crypto world there is not only Bitcoin. There are also other cryptocurrencies, such as the so-called “stablecoins”, which are tied to the value of another asset, such as the dollar. And they are increasingly popular among Argentines.

Ramiro Raposo, VP of Growth and Country Manager in Argentina for Bitwage -the pioneer platform for payment of fees in cryptocurrencies and digital dollars most chosen by workers, freelancers and service exporters-, explains that, “today we have stable cryptocurrencies such as USDC or USDT, which are subject to the value of the dollar, that is, 1 to 1. In addition, a person can keep them in their virtual wallet, avoiding having to leave them under the mattress for fear of a new playpen.” And he adds, “it is an increasingly common option, among Argentines who consider stablecoins as a digital dollar, to use them to collect the fruit of their labor, for example in the export of digital services,” he stresses .

Then he adds: “The most important thing in my opinion is the financial freedom offered by cryptocurrencies, one can choose where to acquire them and where to host them. One of the great missions of cryptocurrencies is decentralization.”

In this sense, a proposal created by Argentines is that of Num Finance , a leading startup in the issuance of local stablecoins for emerging economies, whose premise that cryptocurrencies are a tool to beat inflation is one of the reasons why they decided to create Num Stablecoins, local stablecoins from emerging countries.

The nARS are stablecoins that follow the price of the Argentine peso and allow access to products to combat inflation quickly and with very few barriers to entry. For example, nARS users can access up to a 100% TEA yield in a super simple way and with immediate liquidity, without having to wait 90 days for a traditional fixed term.

“Inflation is a monetary problem that affects most of the emerging economies and, many times, access to financial tools in these regions is limited. That is why our objective is to offer instruments to combat inflation in all the countries in which we operate”, says  Agustín Liserra, CEO & Co Founder of Num Finance.

For Leo Elduayen, CEO and co-founder of Koibanx -a leading company in financial tokenization using blockchain technology-, “beyond cryptocurrencies we must see that the set of Web 3.0 technologies seek to improve the online experience by providing greater decentralization, privacy, security and control for users. Blockchain technology, or chain of blocks, strongly contributes to financial inclusion, mainly because it directly transforms the way in which financial transactions of remittances, savings, credit, insurance, payments and transfers can be initiated, authorized and processed. This translates into lower costs, greater transparency and faster terms without compromising the security of the transaction”.

The CEO and co-founder of BAG -a blockchain technology company that offers tools specially designed for art and culture- , Martín González, recalls that, given the historical difficulties of the Argentine currency, with chronic inflation and constant devaluations against foreign currencies, the citizen seeks refuges of value for savings and investment.

“Stablecoins, such as USDC, DAI or USDT are good instruments to be positioned in the US dollar but with many advantages in terms of transactionality, custody and investment possibilities. Bitcoin is a good investment instrument rather than a savings one due to its price volatility ,” he adds.

González affirms that these stablecoins are used as monthly economic surplus savings, as a collection vehicle or as access to exchanges and purchase and sale of other cryptocurrencies. Instead, “Bitcoin is used as an investment in the medium and long term, due to the fundamentals of the protocol that generate a deflationary, transparent and decentralized system, but which is currently not chosen as a short-term saving due to its volatility” .

On the other hand, Guillermo Escudero, regional manager of Argentina and B2B/Alliances relations

Strategic of CryptoMarket -cryptocurrency exchange platform-, considers that the choice between different cryptocurrencies, such as bitcoin or stablecoins, will depend on the use that is given to it and the risk profile that the person has.

“Let’s remember that saving implies maintaining the value of that savings or even generating a return above inflation. In other words, if my savings are in bills, I will be losing against inflation. In the case of the dollar or some stablecoin tied to the dollar, we are going to be exposed to this inflation, which today due to the rise in rates should not be above 5% year-on-year, but we are going to be taking care of saving in Argentine pesos for example. If we are positioned in Bitcoin or another variable income cryptocurrency, this implies that the price fluctuates according to supply and demand, and could beat inflation, as well as lose, ”he points out .

And then he clarifies: “To put it down on paper, if our position in bitcoin earns 25% per year and dollar inflation was 10%, this implies that my return was 13.63% → Result from subtracting inflation from the return, but discounting the flow of funds making (1+Return/1+inflation)-1”.

Finally, he reflects: “The advantage is the ease of use of crypto assets, this implies that once positioned in cryptocurrencies, one can use them if they wanted to in other parts of the world with someone who accepts them, because crypto systems are global. Now, if I save money in the bank and want to send this, I should do it via Swift, and the bureaucracy and practicality of making that shipment is extremely complex, plus I should make extra payments for currency exchange (spread). Cryptocurrencies tend to facilitate trade between people, this does not imply an evasion of the banking system for illegal purposes, simplyit is the money in the hands of the people and with greater ease of use and transactionality, without depending on archaic systems that generate obstacles in something that by default should be simple ” .

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