Argentina’s Casa de la Moneda struggles to keep up with the central bank’s demand for new banknotes, prompting it to import 1,160 pallets of 1,000-peso denomination banknotes from Paris and Malta.
At the same time, bitcoin’s (BTC) popularity in the country increases.
Inflation in the country reached a record 7.7% in March, and the government has so far refused to issue higher denomination bills. The move to import more banknotes comes ahead of a key election in the country.
The persistent inflation in Argentina has caused bitcoin to reach a record high price against the Argentine Peso (ARS) on April 25. Despite a 9% correction the exchange rate stands at about 6 million ARS, representing a significant increase of more than 100% YTD.
Argentina has been afflicted by economic challenges for some years, including high inflation rates and a growing debt burden.
As the crisis deepens, locals are turning to bitcoin as a potential safe haven, with the black market rate for the United States dollar reaching 460 ARS on April 24, more than double the official rate of 220 ARS.
The country’s central bank has responded by raising its rate by 300 basis points to 81% on April 20 and also restricting access to dollars for certain business payments.
Argentinians are increasingly showing interest in cryptocurrencies, particularly stablecoins, with a recent report indicating that they are the top choice for 50% of the population.
Bitcoin’s popularity is also growing, as evidenced by the launch of a bitcoin-based futures index by the National Commission of Value (CNV). This product will enable accredited investors to invest in bitcoin with settlement in pesos.
As cryptocurrency adoption continues to rise in Argentina, the country has been grappling with regulation, implementing proof-of-solvency procedures for exchanges and custodians and working on requirements and rules for crypto companies.
Furthermore, a recent bill proposed by the Ministry of Economy incentivizes citizens to declare their crypto holdings by offering tax benefits. Lastly, an Argentine province announced its intention to issue a dollar-backed stablecoin in December 2022.