Bitcoin transactions hit new high in Argentina as peso tanks. Argentina, one of Latin America’s largest economies, has faced continued economic troubles dating back several decades.
After the crisis between 2001 and 2002, the country dollarized as it tried to restore confidence. However, that policy was abandoned in favor of a returning peso. The country’s financial troubles, which started in 2018, worsened following the Covid-19 induced economy lockdown.
Argentina’s economic situation poses a precarious balance according to a World Bank survey, released just as the country introduced lockdown steps. The Argentine peso lost 68% of its value since 2018. Annual inflation is over 50% and after a 2.5% fall in GDP in 2018, the economy contracted an additional 2.2% in 2019.
As a result, citizens are turning to Bitcoin. The country saw bitcoin transactions worth $1.4 million recorded in the pas week, making it a new high in the country.
According to a report by Vorem, this figure is nearly double the previous high of $0.96 million recorded in the last week of June.
Citizens who have previously “watched their currency lose value are now turning to bitcoin” and those finding it difficult to “transfer fiat money to other countries” now make use of the cryptocurrency.
Prominent economists are calling for a return to dollarization but as the Vorem report suggests, citizens “might be seeking a safe haven in crypto assets” instead.
[image: Fernando Tavora]