Argentine President Javier Milei Supports Provinces Launching Their Currencies
Upon assuming office as the president of Argentina in December 2023, libertarian Javier Milei pledged not to oppose the implementation of national currencies by individual provinces. This statement follows a public exchange between Milei and Ricardo Quintela, the governor of La Rioja province.
Milei’s Views on Local Currencies
In an interview with Radio Mitre on January 14, President Milei expressed that he would not legally challenge the creation of local currencies by provincial authorities. He believes that the market will determine the value of these projects but cautions that such “quasi-currencies” could lead to inflation, and those accepting them might fall victim to scams.
Potential Risks of “Quasi-Currencies”
President Milei warned that individuals receiving payments in “quasi-currencies” from what he termed “irresponsible governors” might experience a loss of income. Milei suggested that what is not taken from them through budgetary adjustments could be lost through inflation in these quasi-currencies.
Governor Quintela’s Plan for La Rioja
President Milei’s statement comes in response to Governor Quintela’s intention to create a separate currency for La Rioja. This move comes in the context of his implementation of a 50% national currency devaluation to address the country’s significant inflation, which is currently at its highest level in 32 years. Additionally, provincial governments have received reduced funds from the federal budget under the new president’s administration.
Argentina’s President Milei Implements Economic Reforms and Crypto-Friendly Legislation
Argentina welcomed its new president, Javier Milei, on December 10, promising significant economic reforms in the country. Milei’s proposed measures include the dissolution of the central bank and other initiatives aimed at reducing government size and spending.
Tackling Inflation Crisis
The country has been grappling with a prolonged inflation crisis, with the Argentine peso experiencing a 140% increase in annual inflation over the last 12 months. Milei has been outspoken in his criticism of the central bank, describing it as a scam and a “mechanism by which politicians cheat the good people with inflationary tax.”
Law of Bases and Starting Points for the Freedom of Argentines
To address the rising inflation, President Milei introduced the Law of Bases and Starting Points for the Freedom of Argentines to the Argentine Congress in December 2023. This comprehensive bill encompasses reforms in various areas, including tax, labor, criminal, energy, and electoral matters. Notably, it also addresses the regularization of cryptocurrency holdings.
Asset Regularization Scheme
The bill introduces an “asset regularization scheme,” allowing taxpayers to legalize certain assets, including cryptocurrencies, without additional documentation on their origin. The regularization process involves a flat tax on assets, with rates set at 5% if declared by the end of March 2024, 10% from April to June 2024, and 15% from July to September 2024.
Rent Payments in Bitcoin
In a separate development reflecting evolving payment methods, a local landlord and tenant in Rosario, Argentina’s third-most-populated city, have reached an agreement for rent payments in Bitcoin. This contract stood out as the first of its kind in Argentina and was made possible by recent legal amendments enacted by the new presidential administration.
Hot Take: Argentina Embracing Change in Currency and Financial Practices
Argentina’s new president, Javier Milei, has shown support for provinces launching their currencies. This move comes amidst the country’s inflation crisis and the government’s efforts to implement economic reforms. Milei believes in letting the market determine the value of local currencies but warns of potential risks such as inflation and scams. Additionally, his administration has introduced legislation addressing cryptocurrency regularization and witnessed the first rent payment in Bitcoin. These developments signal a shift in regulatory approaches and evolving financial practices in Argentina.
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