Bitcoin: Will Argentina Become the Next El Salvador?

Sahana Kiran
Source – Watcher Guru

In an unexpected development, Javier Milei has emerged victorious as the next president of Argentina. He secured a substantial lead over his rival, Sergio Massa, with over 55% of the votes counted and approximately 99% of the total votes tallied. This outcome signals a noteworthy shift in Argentina’s political dynamics. Milei is known for his vocal opposition to the country’s central bank.

Javier Milei’s rise to the presidency is closely linked to his outspoken criticism of Argentina’s central bank. He has described it as a “scam” and a tool through which politicians exploit the public with inflationary taxes. According to Milei, the central bank does not prioritize the interests of the people. Instead, it contributes to the economic challenges Argentina is facing.

Milei sees Bitcoin as a transformative solution. He envisioned it as a means to return control of money to its “original creator,” the private sector. He views Bitcoin’s decentralized nature as a pathway to escape the centralized control exerted by traditional financial institutions, including the central bank. Although Milei has not explicitly proposed making Bitcoin legal tender in Argentina, he advocates for eliminating the central bank. He is exploring the option of dollarization, particularly in response to the alarming 142% inflation rate recorded in October.

Also Read: Argentina’s President Javier Milei Aims To Replace Peso With US Dollar

The question arises: Will Argentina follow in the footsteps of El Salvador?

The parallels between Milei’s stance on Bitcoin and El Salvador’s groundbreaking move to declare it legal tender prompt speculation about Argentina’s potential adoption of Bitcoin on a national level. El Salvador made headlines in 2021 by mandating businesses to accept Bitcoin. It aimed to enhance financial inclusion and provide an alternative to the conventional banking system.

Notably, Bitcoin adoption in Argentina appears to outpace that in El Salvador, despite the latter’s legal recognition. Ark Invest Research Associate David Puell previously highlighted the growing momentum of Bitcoin adoption in economies such as Argentina, Turkey, and Egypt, where local currencies grapple with instability. While El Salvador’s experience with Bitcoin has elicited mixed sentiments, Argentina may emerge as a frontrunner in embracing cryptocurrency at a national level.

Also Read: Argentina is Adopting Bitcoin Faster than El Salvador: Ark Invest