Javier Milei’s Victory in Argentina Sparks Devaluation and Inflation Maelstrom
The victory of Javier Milei in the Argentine preliminary elections has caused a series of consequences in the country’s economy, leading citizens to turn to cryptocurrency. Milei’s win has sparked discussions about possible dollarization of the country, including the closure of the Central Bank of Argentina. This has prompted individuals and companies to hedge their savings and investments in dollars, causing the Argentine peso to plummet. In response, there has been a high demand for U.S. dollar-pegged stablecoins, such as USDT. However, there are supporters and detractors of Milei’s dollarization plan, with some arguing that it would leave Argentina without control over its monetary policy. The escalating devaluation is also impacting inflation predictions, potentially reaching up to 200% for 2023. This inflation rate would place Argentina among the countries with the highest inflation in the world.
Bitso Launches Cross-Border Institutional Payment Service
Mexico-based cryptocurrency exchange, Bitso, has introduced a new product to simplify cross-border settlements in Latin America. The trial of this service saw over $160 million transacted from August 7 to August 11, with the majority of settlements occurring between the U.S. and Mexico. Bitso aims to boost the region’s economies by facilitating operations between countries and opening trade corridors. To stay updated on the latest crypto and economic developments in Latin America, sign up for our Latam newsletter below.
Hot Take
The unexpected victory of Javier Milei in Argentina has thrown the country’s economy into turmoil. The discussion of dollarization and the closure of the Central Bank has fueled concerns about devaluation and inflation, leading citizens to turn to stablecoins. However, the potential consequences of dollarization, such as the loss of control over monetary policy, have divided opinions. With inflation predicted to reach record levels, Argentina faces significant economic challenges ahead. Meanwhile, Bitso’s new cross-border payment service aims to facilitate trade and boost the economies of Latin American countries.
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