Inflation has devastated Argentina. If you had saved $100,000 in Argentine pesos in 1995, it would be worth about $310 today. In November 2023, the inflation rate would have been equal to 185%.
Recently, the country’s struggling population it started to turn to cryptocurrency as an improved payment method and a better way to save the money you earn. With a new “minarchist” president in office Javier Mileithe country and its workforce are ready to double down on blockchain investments to revive the growth the country so desperately needs.
To make this happen, efforts must be twofold. The country’s new government is expected to create a friendly environment for retail cryptocurrency users and blockchain institutions. On the other hand, national and international companies that interact with the Argentine workforce should promote cryptocurrencies as a valid form of payment and transaction.
Argentina’s thriving crypto scene
The Argentine population has already undergone a steady movement towards the adoption of cryptocurrencies. The use of stablecoins like USDT and DAI is more popular than ever, especially through the informal forex and cryptocurrency exchanges known as Cuevas. Inside these black market “caves” (the literal translation), Argentinians constantly exchange their pesos for other currencies such as US dollars, and vice versa, because they simply cannot rely on their country’s fiat currency.
The positive sentiment towards digital currencies is reflected in the country’s workforce. Freelance professionals, who constitute over 28% of the employed population in Argentina, are driving this, with many opting for cryptocurrency deals. Over half of these 12.6 million freelancers are already paid in cryptocurrency.
Many of these freelancers will work for foreign companies and funnel their salaries into the country’s economy from abroad. Suppose the country’s authorities want to encourage a greater inflow of capital and allow this capital to stimulate growth more effectively. If so, they should actively promote crypto payments within and outside the country’s gig economy.
A cryptocurrency-friendly leader
Fortunately for Argentina’s cryptocurrency-friendly workforce, President Milei’s pro-blockchain stance on the issue has been unusually favorable for a world leader. Previously he stated, “Contracts between individuals are the basis of the market.” These words encapsulate his vision of a market-driven economy in which contracts between individuals replace bureaucratic processes – an ideal situation for the development of blockchain.
In a separate quote has touted his forward-thinking stance on a more decentralized future:
“We must understand that the Central Bank is a scam. What Bitcoin represents is the return of money to its original creation, the private sector.”
Milei has proposed moving towards a dollar-based economy and eliminating “legal tender” laws, allowing the free use of digital currencies and assets, including stablecoins and cryptocurrencies. As Argentina makes this potentially painful transition to the USD, cryptocurrencies will be the perfect intermediary partner to promote to the population throughout the process, as long as payment and transaction channels are open.
Milei is already standing by his previous comments. In December you legalized the signing contracts in Bitcoin and other cryptocurrencies. Companies that interact with Argentina’s workforce should follow suit by offering these alternative payment channels to workers who want them. Companies that do this will be able to work with a broader field of talent and profit from this innovation.
The road ahead
The benefits of using cryptocurrency for Argentine employees and employers are many. For workers, cryptocurrencies offer a hedge against inflation, ensuring their earnings retain value. Employers benefit from the reduced complexity of international transactions and less dependence on the country’s traditional and unstable banking system.
Despite this, the path to widespread adoption of crypto payments is not as clear as it could be. Domestic businesses must support the use of cryptocurrency as a legitimate means of payment and transaction. At the same time, the government must continue to foster an atmosphere conducive to these changes that will allow a digital currency-enabled workforce to thrive and attract more growth to the country.
Integrating Argentina’s cryptocurrency into its workforce would be more than just a financial experiment; it is a strategic move towards economic recovery and stability. As long as Argentina’s government and industries allow it, the country is poised to set a precedent in the use of digital currency for economic recovery.
If these changes occur, cryptocurrency could emerge not only as an alternative for Argentina’s workforce, but as a beacon of hope and stability.