Argentines turn to stablecoins as a hedge after the resignation of former Economy Minister Martin Guzman on Saturday.
Guzman penned a resignation letter published on Twitter after months of infighting surrounding a renegotiated deal with the International Monetary Fund (IMF), which the preceding administration had inked.
The price of USDT in Argentinian pesos at crypto exchanges soared after the minister tweeted his resignation, according to CriptoYa, which tracks prices every minute. One USDT sold for 257 pesos on Binance. On Lemon Cash Exchange, the amount rose 11%, costing about 279 pesos.
While small amounts of crypto moved through Argentine markets, this itself could indicate unrest, as Guzman’s resignation lays bare the division between President Alberto Fernandez and Vice President Cristina Fernandez de Kirchner.
Kirchner, in recent months, has become a critic of the government’s handling of inflation, drawing votes away from Guzman’s deal with the IMF.
Guzman also restructured $65 billion of international bonds with private creditors two years ago, which did little to assuage investor confidence. He went on to stem the tide of the national fiscal deficit after it peaked in 2020.
IMF plays hardball with Argentines
Part of Guzman’s $45 billion debt-restructuring deal with the IMF to avoid defaulting on $19 billion in March included the commitment to stem the use of cryptocurrencies in the nation, a move heavily criticized by citizens, who at the time took to the streets to show their disapproval.
The move also drew criticism from Bitcoin investor Anthony Pompliano, who commended the Argentinian people for making their voices heard.
Crypto adoption increasing despite lack of regulations
The instability of the peso has meant that employees receiving payment in cryptocurrency has increased 380% in the last year, making it the most significant international employee base in the world to be paid in crypto.
In March, Be[In]Crypto reported that play-to-earn games like Axie Infinity were being used to earn crypto even as salaries paid in pesos continued to be devalued. Argentines play on behalf of Americans and Germans and take a portion of the crypto earnings, since many games require significant capital to start playing.
Argentina currently lacks a comprehensive crypto regulatory framework. However, client pressure forced two banks in May to offer clients the option of purchasing USDC, ether, bitcoin, and XRP, using a platform called Lirium, as long as their salaries were paid into their bank accounts.
This move drew censure from the Central Bank, which said that regulated entities should not become involved in an unregulated space.
Crypto mining has traditionally found a home in Argentina’s south that offers cheap electricity. But rising energy taxes amidst increasing crypto popularity has seen one of Argentina’s largest mining companies experience an increase of 400% in its energy costs.
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