After the Resignation of the Economy Minister, Argentina Seeks Refuge in Stablecoins
- According to many local media sources, the government might declare a foreign exchange holiday on Monday to calm markets.
- Customers wanted to protect themselves from a probable Argentine Peso devaluation, according to three major cryptocurrency exchanges (ARS).
- Following Guzman’s departure, the Peso lost over 15% of its value against the stablecoins DAI and tether on the platforms of several major local exchanges.
The resignation of Argentina’s economy minister Martin Guzmán has led to a significant increase in the purchase of stablecoins in the country.
Crypto companies in Argentina told CoinDesk that Argentines purchased between two and three times as many stablecoins over the weekend following Guzmán’s resignation.
The increase in demand for stablecoins is likely due to the economic uncertainty caused by the resignation of a key government official. The Argentine Peso has been notoriously volatile in recent years, and the uncertain economic climate has led many Argentines to seek out alternative forms of currency.
Stablecoins
Stablecoins are digital assets that are pegged to a specific fiat currency, such as the US dollar, and are therefore less susceptible to volatility than other types of cryptocurrency. The increased demand for stablecoins is indicative of a wider trend towards crypto assets in Argentina.
While crypto adoption has been slow in some parts of the world, it has been growing rapidly in Latin America, where countries like Venezuela and Brazil have seen a surge in interest due to high inflation rates and political instability.
The Argentine Peso has long been one of the most volatile currencies in the world. Over the past year, it has lost more than half its value against the dollar.
The recent resignation of economy minister Diego Guzman and the appointment of Silvina Batakis as his replacement has caused further instability, with the Peso plunging 15% against stablecoins DAI and tether on several leading local exchanges’ platforms.
The root cause of Argentina’s currency woes is a lack of confidence among investors. This is largely due to the country’s history of economic mismanagement and high levels of public debt. As a result, even small economic shocks can lead to large sell-offs in the Peso. The current situation is compounded by political uncertainty ahead of next year’s presidential election.
Incumbent President Mauricio Macri is unpopular after years of economic hardship, and it is not clear who will succeed him. This makes it difficult for businesses and individuals to plan for the future, further exacerbating the country’s economic problems.
Barry Pene is a stern blockchain research/copywriter. Barry has been trading cryptos since 2017 and has been invested in issues that would put the blockchain industry on the right pedestal. Barry's research expertise cuts across blockchain as a disruptive technology, DeFis, NFTs, Web3, and reduction of energy consumption levels of cryptocurrency mining.
