With surging inflation, Argentinians could, despite conditions, adopt Bitcoin and crypto on a broader scale to combat the price increase of goods.
Recent reports showed that a municipality in the province of Santa Fe, Argentina, was setting the foundation for using cryptocurrency to tackle high inflation.
Nine months after Deputy President José Luiz Ramón forwarded a bill to parliament with a proposal for government employees to receive salaries in cryptocurrencies. In August 2021, President Alberto Fernández confirmed that Argentina was seriously considering adopting cryptocurrencies ahead of the central bank launching a digital currency.
However, in March 2022, the idea of integrating crypto collapsed when the country signed an agreement with the International Monetary Fund (IMF) for a $45 billion loan to restructure its debt. The international lender set a condition restricting the use of cryptocurrencies, including Bitcoin, claiming they are money laundering agents.
Despite IMF’s stance, the government has been blasted by crypto supporters for allowing to be arm-twisted. Instead of intervening to slow down adoption, proponents firmly believe that the government should collaborate with private and public stakeholders to promote financial inclusion.
As an endorsement of cryptocurrencies and to directly oppose the direction opted by the national government, a municipality in the province of Santa Fe has embarked on cryptocurrency mining to tackle historical economic problems tied to inflation.
Commenting, Juan Pio Drovetta, the Mayor of Serodino, said:
We are not buying crypto and looking to make a profit on a speculative move where we [win] [or lose]. We will be generating cryptocurrencies, so we will always win.
We have been working and researching a lot on this project, which is very broad and has to do with understanding the economy to improve economic development. The response was immediate and very important with collective participation between the public and private sectors, which did not hesitate to collaborate through economic and human resources. It is a pilot test from which we could get 60 or 70 thousand pesos a month depending on the fluctuation. One hundred percent of the profit will go to a local institution, and that institution will have to present a project that will be financed.
The municipality has since funded a project establishing a crypto mining farm. Profits earned from cryptocurrency mining would be used to pay taxes.
- kanchanara-5ixVD22x22o-unsplash: Photo by Kanchanara on Unsplash