This is a summary of the op-ed “Why Crypto Isn’t a Tool for Protest in Argentina” by Leah Callon-Butler, published on CoinDesk on September 8, 2022.
For decades, Argentina has been experiencing political dysfunction and instability, corruption, boom-and-bust cycles, and raging inflation. Here, crypto found its place, to some degree alleviating Argentina’s political and economic difficulties. Because of that, there have been many articles that romanticize crypto’s role in the country, and most imply that Argentines use crypto as a weapon to fight for a new financial paradigm. However, Argentina’s use of stablecoins is not a sign of revolution.
Inflation is everywhere, but in Argentina, it ran over 70% in 2022 and was expected to go triple digits by the year’s end. This isn’t unheard of in the country — between 1975 and 1990, Argentina averaged 300% inflation. Amid this persistent market uncertainty, Argentina’s appetite for the stability of USD had become so large that it began to drain the central bank’s own reserves.
In response, the government began to set a high price for dollars and put a limit on how much the Argentine people could buy. On top of that, they would slap buyers with a 65% tax. It’s an attempt to stabilize the economy, but all it has done is create a big black market of illegal “blue dollars” that are cheaper and closer to market price than the “white dollars” that the government offers.
It’s not hard to imagine why Argentines would prefer crypto: First, there’s no limit on how much you can buy. Second, crypto never sleeps, and so it can be acquired at any time, unlike dollars that are accessible only during business hours.
The crypto community loves to hype adoption stories like Argentina’s, but there’s a difference between an active, politically charged protest that demands real change versus coping measures adopted out of necessity.
“Crypto is a safe haven, a bomb shelter, peace of mind and a store of value for people trapped in a place where ‘value’ is fleeting. And it does an excellent job at that.”
— Leah Callon Butler, Director, Emfarsis
Read the full article here:
“Why Crypto Isn’t a Tool for Protest in Argentina” by Leah Callon-Butler
Published September 8, 2022 on CoinDesk
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