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Why Argentina is increasingly embracing crypto

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According to a new report from BBC.

The Argentine peso, the country’s national currency, is already highly volatile and subject to a series of financial controls that make buying and investing with the currency increasingly onerous for ordinary citizens. Amid this uncertainty, the cryptocurrency enjoyed a stratospheric boon. According to Chainalysis, Argentines won $1.86 billion in cryptocurrency in 2021.

“When you have restrictions, you need tools for freedom,” said Jerónimo Ferrer, a crypto enthusiast in Argentina. BBC News.

In the 1990s, Argentina’s financial system was in dire straits, with citizens seeing their life savings disappear and their personal bank accounts completely frozen. Today, the situation is still precarious, with Argentines of all income levels facing restrictions on foreign currency transactions.

“It’s our money, and it’s the only money politicians can’t destroy,” Ferrer told the BBC.

Long-standing distrust of the government’s handling of the Argentine peso has also caused many Argentines to embrace Bitcoin. In a town in Patagonia, 40% of companies are ready to make payments in Bitcoin. Many see it as protection against worsening inflation. Currently, the year-on-year inflation rate stands at over more than 50 %a surprising figure where the depreciation of the peso continues to pinch most Argentine wallets.

Yet cryptocurrency adoption has been uneven in Argentina, as elsewhere. “Today, it’s not a technology that everyone can access,” said blockchain consultant Lucia Lizardo. BBC. The vast majority of crypto enthusiasts are young and male, who enjoy benefits such as a relatively stable income and technical training.

Argentina’s central bank has warned the public about a proliferation of cryptocurrency scams targeting user wallets. But that hasn’t deterred most investors.

The explosion in the number of users has also been boosted by the fact that it is cheaper to mine Bitcoin in the country due to low energy costs.

“I trust math and software more than politicians,” Ferrer told the BBC. “I think Bitcoin for Argentinians should be a no-brainer.”