While Argentina is involved in increasing inflation and a peso running with battered domestic asset prices, the United States has stepped up with the promise of a financial lifeline – even though Bitcoin advocates remain in doubt it will make a difference.
The peso was nearly 4.5% last week as investors questioned President Javier Milei’s ability to deliver fiscal and structural reforms following his party’s poor display in the Buenos Aires province election earlier this month. The seller-off is combined with a corruption Investigation involving a member of the Milei family, deepening political uncertainty.
Investor Unease has sparked heavy flows from Argentine markets. The central bank was forced to spend nearly $ 1.1 billion in three days to defend the peso – a heavy total given that the country was holding just $ 20 billion in liquid foreign reserves, according to Bloomberg.
The prices of Argentina’s dollar bond were also submerged in the middle of reminding that Milei’s government was burning by cash at an unstable speed.
In the midst of the chaos, US Secretary of Treasury Scott Bescent said on Monday that Washington considered Argentina “a systematic important allies” in Latin America, declaring that “all options for stabilizing are on the table.”
The proposals under the discussion included replacement lines, direct money purchase and the use of treasury stabilization funds to buy debt to the Argentine government, Bessent said.
Bescent’s statements have emerged to restore the investor’s confidence. According to Financial periods. The dollar bonds also present a sharp rebound.
The controversy, however, followed Milei throughout his presidency. As Cointelegraph noted, His endorsement of Libra -a cryptocurrency project widely criticized as a pump-and-dump scheme-triggering a federal investigation, though Milei later abolished the Task Force assigned to the case.
Related: The Libra Token Creator Fights Class Suit, mentioned jurisdiction lack
Singcoin Standard Socathing with -Set
As president, Milei is struggling to adjust to Argentina’s fiscal fiscal. Economist Saifean Ammous, with -set of The Bitcoin standardThat was a dispute Milei in fact exacerbates the country’s condition By what he called “debt and inflation ponzi ended.”
Ammous Faulted Milei for failing to fulfill inflation, noting that Treasury has managed to sell the latest bond auction only after walking annual interest rates at an eye-watering 88%. He also accused the government of expanding money supply despite Milei’s libertarian branding.
On Friday, Ammous, who has been teaching the fall of the peso has doubled since Milei’s office.
Related: Tokenization can unlock the growth of capital markets in Latin America
Argentina’s Crypto adoption accelerates in the midst of economic, political pressure
Although the peso operates within a managed money band – with dollars changing between 948 and 1,475 – electoral uncertainty drives Argentines to look for shelter in stronger successors, especially US dollar -backed stablecoins.
“Electoral uncertainty drives Argentines to look for shelter on currencies that are stronger than pesos, such as the crypto dollar,” Ignacio Gimenez, Lemon business manager, said a crypto trading app, in cointelegraph.
Gimenez noted that September 14 marked the highest -day -to -day volume of Stablecoin purchases platform since 2024.
“From mid -August to the present, when the dollar began to rise, we noticed a dominant stablecoin sales in purchases, except for the peak of the election. It shows that with higher dollars, many Argentines now choose to sell and get pesos,” he said.
Asked about Milei’s economic reforms and its impact on Adopting CryptoGimenez said the government’s fiscal adjustment was ongoing, and it was too early to judge the results. What remains clear, however, is “Argentines continue to return to Stablecoins as a real-time fence against political and economic uncertainty that introduces our country.”
Stablecoins in Argentina are not only used as protection against money debasement, but also for international payments, remittances and access to decentralized finance.
Bitcoin (Btc) also gained traction as a value store. Since 2024, when the stability of the exchange rate and decline of inflation has touched, bitcoin is, in some cases, it becomes more attractive than the US dollar. “Currently, there are many Argentine with bitcoin than crypto dollars in lemon,” Gimenez said.
Related: USDC, USDT Stablecoins is ‘value store’ in Latin America – Bass
