Inflation has ravaged Argentina. If you’d saved $100,000 USD worth of Argentine pesos in 1995, they would be worth about $310 USD today. In November 2023, the inflation rate was reported to be as high as 185%.
Recently, the country’s struggling population has begun to turn to cryptocurrency as an improved payment method and a better way to save the money they earn. With a new ‘minarchist’ president in Javier Milei, the country and its workforce are primed to double down on blockchain to kickstart the growth the country so desperately needs.
To make this happen, efforts must be twofold. The country’s new government should create a friendly environment for retail crypto users and blockchain institutions. On the other side, domestic and international companies interacting with Argentina’s workforce should promote crypto as a valid form of payment and transaction.
Argentina’s Burgeoning Crypto Scene
Argentina’s population has already undergone a steady move towards crypto adoption. The use of stablecoins like USDT and DAI is more popular than ever, especially through informal forex and crypto exchanges known as Cuevas. Inside these black market ‘caves’, (the literal translation), Argentinians are constantly exchanging their pesos for other currencies like US dollars, and back again because they simply cannot rely on their country’s fiat currency.
Positive sentiment towards digital currencies are reflected in the country’s workforce. Freelancers, who constitute over 28% of the employed population in Argentina, are driving this, with many opting for cryptocurrency settlements. Over half of these 12.6 million freelancers are already paid in cryptocurrency.
Many such freelancers will work for foreign companies and channelling their salaries into the country’s economy from abroad. Suppose the country’s authorities want to encourage more capital inflow and allow this capital to stimulate growth more effectively. In that case, they should actively promote crypto payments inside and outside of the country’s gig economy.
A Crypto-Friendly Leader
Luckily for Argentina’s crypto-friendly workforce, President Milei’s blockchain-friendly stance on the matter has been unusually supportive for a world leader. He previously stated, “Contracts between individuals are the basis of the market.” These words encapsulate his vision for a market-driven economy where contracts between individuals replace bureaucratic processes – an ideal situation for blockchain to blossom.
In a separate quote he advertised his forward-looking stance on a more decentralized future:
“We have to understand that the Central Bank is a scam. What Bitcoin represents is the return of money to its original creation, the private sector.”
Milei has proposed to drive towards a dollar-based economy and eliminate ‘legal tender’ laws, enabling the free use of currencies and digital assets including stablecoins and cryptocurrencies. As Argentina makes this potentially painful move towards USD, crypto will be the perfect intermediary partner to promote to the population throughout the process as long as payment and transaction channels are open.
Milei is already making good on his previous comments. In December, he legalised the signing of contracts in Bitcoin and other cryptocurrencies. Companies that engage with the Argentine workforce should follow suit by offering these alternative payment channels to the workers who want them. Those companies that do will be able to work with an expanded field of talent and profit from this innovation.
The Road Ahead
The benefits of using cryptocurrency for Argentina’s employees and employers are manifold. For workers, crypto offers a hedge against inflation, ensuring their earnings retain value. Employers benefit from the reduced complexity of international transactions and lesser reliance on the country’s traditional, unstable banking system.
Despite this, the road to widespread adoption of crypto payments isn’t as clear as it could be. Domestic firms need to advocate for using cryptocurrency as a legitimate means of payment and transaction. Concurrently, the government needs to continue to foster an atmosphere conducive to these changes that will allow a digital currency-enabled workforce to flourish and attract more growth to the country.
Argentina’s cryptocurrency integration into its workforce would be more than just a financial experiment; it’s a strategic move towards economic recovery and stability. As long as the government and Argentina’s industries allow it to happen, the country is poised to set a precedent in the use of digital currency for economic revival.
If these changes occur, cryptocurrency can emerge not merely as an alternative for Argentina’s workforce but as a beacon of hope and stability.