Argentines turned to stablecoins as a hedge following the resignation of former economy minister Martin Guzman on Saturday.
Guzman tweeted a letter of resignation after months of infighting over a renegotiated International Monetary Fund deal with the previous administration.
According to CriptoYa, which tracks prices on a minute-by-minute basis, the price of the Argentine peso for USDT surged on the cryptocurrency exchange after the minister resigned on Twitter. One USDT was sold on Binance for 257 pesos. On the Lemon Cash Exchange, the amount went up by 11% to around 279 pesos.
While small amounts of cryptocurrencies flowed through Argentine markets, that in itself could indicate turmoil, as Guzman’s resignation exposed divisions between President Alberto Fernandez and Vice President Cristina Fernandez de Kirchner.
In recent months, Kirchner has become a critic of the government’s handling of inflation, costing Guzman’s deal with the International Monetary Fund votes.
Two years ago, Guzman also restructured $65 billion worth of international bonds with private creditors, which did little to ease investor confidence. After peaking in 2020, he continued to stem the tide of the nation’s fiscal deficit.
IMF takes tough stance on Argentines
Part of Guzman’s $45 billion debt restructuring deal with the International Monetary Fund to avoid a $19 billion default in March included a pledge to block the use of cryptocurrencies in the country, a move heavily criticized by citizens who Taking to the streets at the time showed their disapproval.
The move also drew criticism from Bitcoin investor Anthony Pompliano, who praised the Argentine people for making their voices heard.
Crypto adoption continues to increase despite lack of regulations
The instability of the peso meant a 380% increase in employees accepting cryptocurrency payments last year, making it the most important group of international employees in the world paid in cryptocurrency.
March, yes[In]Crypto reports that game money-making games like Axie Infinity are being used to earn cryptocurrency even as wages paid in pesos continue to depreciate. Argentines play games on behalf of Americans and Germans and earn a portion of their crypto earnings, as many games require a lot of money to start playing.
Argentina currently lacks a comprehensive crypto regulatory framework. However, customer pressure forced the two banks in May to offer customers the option to buy USDC, ether, bitcoin and XRP using a platform called Lirium, as long as their salaries are paid into their bank accounts.
The move drew condemnation from the central bank, which said regulated entities should not venture into unregulated territory.
Traditionally, crypto mining has found a home in southern Argentina that provides cheap electricity. But with the growing popularity of cryptocurrencies and rising energy taxes, the cost of energy for one of Argentina’s largest mining companies has increased by 400%.
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