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Argentinians Turn To Bitcoin as Corrupt Government Announces Another Default

The demand for Bitcoin in Argentina rocketed yet again after the government announced it would be defaulting on payments yet again.

As a result, long-suffering Argentinians were quick to start buying BTC as a devaluation of the peso was expected imminently.

Corrupt Argentinian Government Continuously Default

Argentina has long had economic troubles due to government corruption, and this latest announcement is no surprise. And the only way it can avoid another default is if it manages to restructure billions of dollars with foreign creditors.

Many bondholders were quick to voice concern with the situation, and the people were just as quick in their uptake of Bitcoin, as a record number of peso-BTC transactions were recorded.

Government Limits Argentinians to USD Transactions

It comes as no surprise, however. Not only is Bitcoin the soundest of money, in a bid to strengthen its currency the Argentinian government imposed peso-USD restrictions last year.

In October 2019, Argentina’s central bank restricted dollar purchases to $200 per month, just a month after restricting it to $10,000 per month.

That's basically inviting its people to invest in Bitcoin, something Local Bitcoins commented at the time of Argentina’s limited fiat transaction. Although the government tried to put blockers on credit card/BTC transactions, all to no avail.

A representative for Local Bitcoins, the largest BTC exchange in South America, said, ‘Bitcoin was vital in regions where economic instability was the norm. It gives people autonomy over their own money and enables easy and direct access into the global economy through a very efficient and reliable financial system.’

Argentinian Peso Declines as Bitcoin Volume Soars

Argentina’s economy slumped over 50% just last year, and with another default and the state of the world economy, it can only slip further on its way into oblivion.

Bitcoin demand has risen over 1000% since the start of the year 2018, in Argentina, and volume of BTC transactions rose over 400% in the same period.

Nobody outside the Argentinian government can blame the people. It’s a never ending problem for them. I witnessed it first hand when I was travelling there in 2002.

Back then the peso was parity with the USD, and almost overnight, it had dropped to 2 peso for a dollar. For my travels, it was great as everything was half price, but for the long suffering Argentinians, it was yet another reason to get out on the streets of Buenos Aires and protest.

No doubt the government will try and boost itself with a claim to the Falkland Islands, something that always triggers some patriotism in Argentinians. But even they’re realizing it’s all pantomime to deflect the true corruption of the very people that lead them.

What Next For Argentinians?

Well, it’s just another default for the pain stricken people of Argentina. The wealthy will have their value outside of the peso anyway, but as with anything else it’s the poor who suffer most.

As Bitcoin grows at least they have the option of getting out of the dissolving peso, and no doubt the government are waking up to this.

The central bank of Argentina have entered into a partnership with Bitcoin startup IOV Labs on 21st April 2020. It's believed they're are working on a blockchain-empowered payment system that helps the bank streamline its services.

This will be a private blockchain, but at least it shows the government is working within the space.

It will also come too late for the people of Argentina who have seen their wealth evaporate over the decades.

This is the very reason Bitcoin was created. It gives people another option. Banks and governments can print money at will, and it always leads to hyperinflation. We will see the same thing with the USD one day.

All of this quantitative easing, and now UBI, and even ‘unlimited printing’ can only end up going one way. And that can only be good for Bitcoin.

Author: Tommy Limpitlaw