In a recent statement, Argentine President Javier Milei reiterated his support for using Bitcoin (BTC) and other currencies in the national economy.
His vision promotes free competition of currencies, allowing citizens to choose their preferred monetary units.
Bitcoin and Beyond: Milei’s Vision for Free Currency Competition in Argentina
Milei’s statement responded to Gabor Gurbacs, former Director of Digital Asset Strategy at VanEck, who replied to his hello tweet with “Bitcoin for all.” Milei assured his administration would allow free competition for currencies, including Bitcoin and other units such as West Texas Intermediate (WTI) and British Thermal Units (BTU).
Read more: Crypto Adoption in Argentina: Everything To Know
“There will be free competition of currencies, so if you want to use Bitcoin, there will be no problems. And, you can also use other units such as WTI, BTU, and the one that is most appropriate for your business. It is more accounting-wise; it is resolved by the functional currency method,” he stated.
From a different perspective, Milei’s statement can be seen as inspired by Nayib Bukele’s administration in El Salvador, which has allowed the free circulation of Bitcoin. However, the Argentine context is slightly different from El Salvador.
The country struggles with inflation from previous years and the tax uncertainty associated with cryptocurrencies. Additionally, Argentina has a marked preference for stablecoins as a means of payment. Ricardo Mihura, a crypto regulation specialist and President of the NGO Bitcoin Argentina, shared his insight regarding the current situation.
“For the use of Bitcoin as currency, Argentina must make a drastic change in its tax treatment. It is impossible to use Bitcoin as currency if each transaction generates a capital gain or loss that is taxed by the income tax. This is not the case with any foreign currencies because exchange rate differences are exempt for individuals. There is still significant discrimination against Bitcoin and cryptocurrencies in Argentina,” he explained to BeInCrypto.
Despite these challenges, Milei remains determined to institutionalize more Bitcoin in the Argentine economy, albeit more “in his own way.” In December 2023, the Minister of Foreign Affairs, International Trade and Worship confirmed that the government would allow contracts in Bitcoin, which has consolidated hope in the crypto community.
Milei’s administration has also faced criticism. In the first quarter of 2024, the crypto community, including El Salvador, gave Milei harsh feedback for bowing to pressure from the Financial Action Task Force (FATF) and establishing a law for stronger regulation of Service Providers of Virtual Assets (PSAV).
Read more: How to Protect Yourself From Inflation Using Cryptocurrency
Nonetheless, Argentina’s opening to free currency competition could significantly change the country’s economy, especially in a context of high inflation and economic uncertainty. However, implementing and accepting these measures will need to be seen in the coming months.
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