In a context where exchange restrictions are a reality that is difficult to circumvent, blockchain technology stands out as a promising alternative. Today, any Argentine crypto user (1 in 4 users -traditionally banked-) has opted to invest in Bitcoin or Stablecoins or other cryptocurrencies to safeguard their assets, allowing them to save and transfer funds out of the country, to convert them into cash in other latitudes, all while evading the restrictions imposed by the State. The peculiarity of the blockchain lies in its autonomy, as it is not subject to control by a central entity, which eliminates restrictions or supervision by countries or financial institutions. This provides a viable route to preserving the value of savings in a scenario of chronic inflation and restrictions on the purchase of foreign currencies.
The Argentine Context. Historically, Argentina has imposed exchange controls that limit the acquisition of dollars through the traditional financial system. This measure seeks to preserve the country’s foreign exchange reserves, but at the same time, it creates challenges for its citizens, who wish to protect their savings from inflation, or for example to access foreign exchange for real estate transactions, as all real estate is priced in dollars, due to the volatility of the Argentinean peso over time.
The economic and regulatory situation in Argentina regarding the purchase of dollars has been quite restrictive in recent times, affecting both citizens and companies. The Argentinean government has imposed several restrictions on financial dollar transactions in order to contain the escalation of the dollar. These measures have been taken in the midst of an exchange rate crisis facing the country.
There are different ways of acquiring dollars in Argentina, such as the MEP dollar (Mercado Electrónico de Pagos) and the CCL dollar (Contado con Liquidación). The Comisión Nacional de Valores (CNV), a regulatory body similar to the SEC in the USA, issued a resolution that establishes a mandatory parking period of 5 working days for the purchase of MEP or CCL dollars with foreign law bonds, while Argentine law bonds have a one-day parking period. Parking is a term that must be complied with in the financial market when buying MEP dollars, i.e. when buying bonds with pesos and selling them to receive dollars.
In addition, at least 12 restrictive measures and conditions have been implemented for Argentines wishing to acquire foreign currency, which further complicates the situation for those seeking to dollarise through traditional channels. It is worth noting that the banking penetration of Argentinean citizens is the lowest in Latin America.
All these factors, together with the restrictions on the purchase of dollars, have led citizens to seek alternatives for acquiring the US currency without resorting to the black market (blue dollar). This has highlighted the need for alternative solutions that allow Argentines to access dollars legally and securely.
This context has led many Argentines to see blockchain technology and cryptocurrencies, specifically Tether (USDT), as a viable solution to circumvent government restrictions and access the global economy.
Blockchain Technology: An Alternative Channel. Blockchain, evidenced through the use of Bitcoin, provides a route to transfer and convert money outside the country, bypassing state restrictions. This is especially reflected in the adoption of Tether, a cryptocurrency that maintains a 1:1 parity with the US dollar, offering a stable and secure solution for maintaining the value of savings in a context of inflation and currency restrictions.
USDT Buying and Selling Process. Through numerous cryptocurrency exchange platforms, Argentines can buy and sell USDT relatively easily, providing an alternative to traditional routes for acquiring dollars. The process begins with registration on an exchange platform, followed by the deposit of funds, either in Argentine pesos or other cryptocurrencies, and culminates with the purchase of USDT, which can then be withdrawn or used for transactions on or off the platform.
This scenario highlights the crucial role of blockchain and cryptocurrencies in facilitating access to the global economy, challenging traditional financial regulations and paving the way for wider adoption of these emerging technologies.
Remarkably, the emergence of blockchain technology and cryptocurrencies such as Tether (USDT) has provided Argentines with a bridge to financial stability that seemed unattainable just two decades ago, during the 2001 crisis. Now, with these digital tools, Argentines have the ability to save, buy and hold the value of their work over time, exploring financial horizons that transcend traditional barriers. The blockchain has not only unleashed a financial revolution, but has also planted the seeds of a more inclusive and decentralised economy, showing a future where financial autonomy is an achievable reality.
Blockchain and USDT: New Financial Avenues in Argentina
Tether (USDT) is presented as a stablecoin cryptocurrency, whose value is tied to that of the US dollar. This gives it a number of advantages over other cryptocurrencies and puts it in a favourable position compared to the US dollar in terms of stability and utility.
Stability of value is one of the most appreciated features of Tether, as, unlike cryptocurrencies such as Bitcoin or Ethereum, its value is not subject to drastic fluctuations over short periods of time. This translates into a protection against inflation, especially relevant in countries like Argentina, where high inflation rates and exchange rate restrictions are daily challenges for its citizens.
In addition, Tether facilitates access to the global economy, allowing international transactions without the restrictions and fees associated with traditional financial systems. Its widespread acceptance and use in the crypto space makes it a liquid option for investors and users. The transparency and security provided by blockchain technology are also inherent benefits of USDT.
Compared to the US dollar, which is a fiat currency backed by the US government, Tether stands as a digital representation of the dollar on the blockchain. Both maintain parity of value, but Tether adds the advantage of transactionality in the digital ecosystem and the ability to operate outside the constraints of the traditional financial system. In addition, it facilitates transactions on blockchain platforms, being especially useful in cryptocurrency trading, and acting as a bridge between the crypto and fiat worlds.
This scenario underlines the crucial role that blockchain and cryptocurrencies can play in facilitating access to the global economy, especially in markets with severe financial constraints. It also lays the groundwork for wider adoption of decentralised technologies, showing a glimpse of the financial future that could await us in an increasingly digitised world.
Analysing a study published by Chainalysis in September 2023, focusing on the advancement of the annual global cryptocurrency adoption index, it highlights Brazil, Argentina and Mexico among the top 20 countries in cryptocurrency adoption at the grassroots level, focusing on the participation of ordinary individuals in the use and holding of these digital currencies. The index is divided into five sub-indices that consider aspects such as cryptocurrency value on centralised exchanges, P2P trading, and the use of DeFi protocols, weighted by variables such as population size and purchasing power.
Despite an overall decline in global cryptocurrency adoption, lower middle-income (LMI) countries have shown a strong recovery, suggesting a promising future for cryptocurrencies in the global economy. Brazil, Argentina and Mexico rank ninth, fifteenth and sixteenth respectively in the ranking, with a notable presence of countries from Central Asia, South Asia and Oceania at the top. The article also mentions the implementation of a Bitcoin education programme in public schools in Mexico and the continued institutional adoption of cryptoassets in high-income countries.
Brazil, ranking ninth in the global adoption index, shows significant progress in integrating cryptocurrencies into its economy. Mass adoption in Brazil can be attributed to several factors, including relative economic stability and a growing technology market. The inclusion of cryptocurrencies in Brazilians’ financial strategies indicates a trend towards diversification and greater financial autonomy.
Argentina: Between Inflation and Innovation
Argentina, ranked fifteenth, faces unique economic challenges, such as high inflation rates, which have prompted many to seek refuge in digital assets. Cryptocurrencies offer an attractive alternative to preserve the value of money in a volatile economic environment. Moreover, the adoption of cryptocurrencies in Argentina reflects a change in financial mindset, prioritising security and decentralisation.
Mexico: Education and Adoption
Mexico, ranked sixteenth, is taking innovative steps to promote the understanding and use of cryptocurrencies. One notable example is the introduction of Bitcoin education programmes in public schools. This initiative not only raises awareness and knowledge about cryptocurrencies among young people, but also prepares the next generation for an increasingly digitised economy.
The adoption of cryptocurrencies in Brazil, Argentina and Mexico reflects a growing trend in Latin America towards financial digitisation and economic empowerment. As these countries continue to explore and adopt cryptocurrency technologies, they are emerging as leaders in the innovative use of digital assets, setting a promising path for the future of finance in the region.
Blockchain technology, which underpins cryptocurrencies, allows secure and transparent transactions without the intervention of intermediaries. This creates an alternative channel for Argentines, who can buy and sell USDT, a cryptocurrency anchored to the value of the dollar, without the restrictions of the traditional system.
USDT emerges as a viable option for those looking to hold value in dollars. By being anchored to the US dollar, Tether provides some stability against the volatility of other cryptocurrencies and the local currency.
Buying and selling USDT on cryptocurrency platforms is a relatively straightforward process. Users can transfer Argentine pesos to an exchange platform, purchase USDT and then, if they wish, convert these USDT into other cryptocurrencies or even dollars if they have a foreign bank account.
This scenario highlights the crucial role that blockchain and cryptocurrencies can play in facilitating access to the global economy, especially in financially constrained markets. It also paves the way for wider adoption of decentralised technologies, showing a glimpse of the financial future.
The emergence of blockchain technology and cryptocurrencies such as Tether (USDT) has provided Argentines with a bridge to financial stability that seemed unattainable just two decades ago, during the corralito crisis. Now, with these digital tools, Argentines have the ability to save, buy and hold the value of their work over time, exploring financial horizons that transcend traditional barriers. The blockchain has not only triggered a financial revolution, but has also planted the seeds of a more inclusive and decentralised economy, showing a future where financial autonomy is an achievable reality.