Crypto Worldwide: Argentina’s Approach To Cryptocurrency Adoption

“Argentina may be able to position itself as a possible economic comeback story if they carefully begin preparing for a partial adoption of Bitcoin as a legal tender. The fixed supply and drastic appreciation of Bitcoin represents remedies against problems such as hyperinflation. Mass adoption of cryptocurrency in various spaces and degrees, Bitcoin in particular, is happening as we speak. If Argentina starts partial adoption of Bitcoin in 2021, it will greatly relieve some of the effects of hyperinflation and place itself as a pioneer of country-wide adoption of cryptocurrency. There is a risk in this, however I feel it is a risk worth taking.”

Adam C. English, JD – Co-Founder COO, PiñaPay

During an interview streamed through the YouTube channel operated by Filo News, Caja Negra, Fernandez made it clear: cryptos had the potential to become a “hard currency” that could combat inflation. Specifically, he believes that even it could “nullify inflation.”

But, there is a catch on his bullish stance: he calls for being always cautious when discussing the virtual currencies matter in Argentina.

“The discussion about the operation of cryptocurrencies is worldwide, and I must confess that it is a matter of care, in my case, because of the unknown. But there is no denying it, and perhaps it is a good path,”

Fernandez stated during the interview – a quote that was published on his press office’s Twitter account. Interesting, ah?

Inflation in Argentina

Hyperinflation is a hot potato that the president had to deal with since he took the country’s leadership, as the Argentinian peso is highly devalued. Nowadays, USD 1 is worth 0,010285 Argentine pesos. However, that’s not a pessimistic figure when compared with others.

As the pandemic is hurting the world’s economy, the South American country has posted a cumulative 42.6% over the last months, having one of the highest inflation rates globally.
That said, it’s not surprising that Bitcoin (BTC) and the cryptocurrency’s topic are now part of the official talks, as the government looks for ways to counter the growing levels of inflation.

“The advantage of cryptocurrencies is that the inflationary effect is largely canceled out. Even though things are mixed up when it comes to the microeconomic, technological, the transparent, and the non-transparent. So it’s probably a good way.”

South American Politicians Shift Focus Toward Crypto

Of course, this is not the first time cryptos are addressed in official talks. After El Salvador’s adoption of Bitcoin as a legal tender, South American politicians have started to show interest in the matter. In fact, in July, an Argentinean deputy presented a bill that proposes country’s workers opt for Bitcoin payments of their wages.

As BTC finally recovered from the substantial decline suffered over the last months, testing levels below $30,000, it seems that interest could skyrocket among politicians globally, especially from countries with troubled economies and boosted by the COVID-19 pandemic.

Will Argentina follow El Salvador’s path in adopting Bitcoin as a legal tender? But most importantly, will Bitcoin help to combat hyperinflation?

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