Argentina experienced a political crisis this weekend, following the resignation of the Minister of Economy. And the consequences have extended to the world of cryptocurrencies. Fearing a too sharp fall of the peso (ARS), Argentines have indeed rushed to the stablecoins dollars, according to several local sources.
Argentina shaken by the departure of its economy minister
“I am writing to present my resignation from the post of Minister of the Economy of the Nation, which you have honored me with since December 10, 2019.” This is how Martin Guzman announced last Saturday his resignation. Already facing a marked economic crisis, Argentina has been turned upside down by this departure. Especially since Guzman was the IMF’s number one contact for the thorny issue of refinancing the country’s debt.
Unsurprisingly, the Argentine peso (ARS) took a hit, reaching a low of $0.007 yesterday.
Interviewed by AFP, Argentine political analyst Carlos Fara was clear:
“The resignation will have a very negative effect on the markets”
What consequences for crypto markets?
This event is influencing even cryptocurrency markets, according to local players. According to information from CoinDesk, exchange platforms located in Argentina have seen a tidal wave of users flocking to dollar stablecoins since yesterday.
In search of monetary stability, users have reportedly purchased two to three times more stablecoins than usual. According to Sebastian Serrano, CEO of local exchange platform Ripio, cryptocurrency purchases are experiencing spikes that follow the news:
“When news like this happens in Argentina, because of the 24/7 nature of cryptos, this is the first market where Argentina goes to look for a price for the US dollar. So that drives volumes up.”
This again shows the potential appeal of fiat currency-indexed cryptocurrencies, which are more flexibly accessible by populations affected by inflation.
Argentina continues to open up to cryptocurrencies
It must be said that Latin America is a cradle of adoption for cryptocurrencies, and Argentina in particular. Last May, a study revealed that 12% of Argentines owned cryptocurrencies by the end of 2021 – and the peso has only plummeted since.
Furthermore, the country was located 10th in Chainalysis’ 2022 ranking, which lists the territories with the highest adoption of cryptocurrencies.
In 2022, Latin America once again marks the gap with other territories: adoption is happening at the individual level, and out of necessity. The big crypto companies are not wrong about this, as many have started to turn their sights to this region.