09.12.2021

Argentina may legalize bitcoin to protect against inflation

Argentine President Alberto Fernandez suggested that bitcoin would help the country cope with inflation, and allowed the possibility of issuing CBDCs. During an interview with Filo News, the politician stated that he had no reason to oppose the introduction of digital assets.

Answering the question about the possible issue of the national digital currency and the legalization of bitcoin, the president said:

“I don’t want to go too far […] but there is no reason to say no. They say the advantage [of cryptocurrencies] is that the inflationary effect is largely reduced to zero. “

Inflation is one of the most pressing problems for Argentina. The economy, which Fernandez inherited in 2019 from the previous president, Mauricio Macri, was in a deplorable state. The Argentine peso has dropped 77% since December 2019, according to government data.

Fernandez noted that bitcoin and other cryptocurrencies are increasingly perceived as an excellent inflation hedging tool, but he himself is wary of this approach:

“This is a global debate and I must admit that I approach this topic with caution. In my case, the caution is due to the fact that they [cryptocurrencies] are not yet very familiar and understandable to me. Many people have similar concerns, which is why we do not see systematic implementation. But that’s something worth thinking about. “

The position of Argentina’s central bank governor, Miguel Pesce, differs from that of the president. At a recent IAEF conference, he stated that bitcoin is not a financial asset and has no value. The official also noted that cryptocurrencies “can be very harmful” to economic stability.

Recall that in May, Argentina’s Federal Office of State Revenue ordered cryptocurrency exchanges to transmit data on users’ transactions on a monthly basis.

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