By Shelly Melancon (Switzerland)
In the recent news, President Alberto Fernandez of Argentina has shown that he is currently open to cryptocurrency and embracing digital assets. According to him, it would be unwise to insist on delaying joining the new trend of the digital assets class as there is no reason for further delay.
In an interview, when asked about cryptocurrency, particularly whether he would give Bitcoin or a Central Bank Digital Currency a chance just we see El Salvador do, he said that not wanting to go too far, there is no justification to hold on against this new digital trend, according to him the benefit of its adoption would mean inflation and its effects would decline to a large extent. The issue of inflation has been a stringent topic in Argentina as it was a serious issue during the past administration. According to reports 100 pesos in 2019 now equates to 661 Argentinian pesos.
Central Bank’s Reaction
Though there is a rigid control on the country’s currency President Alberto indicated that the adoption of Bitcoin would be a step forward in protecting the country from further inflation. He also joined that because we are still in the early cryptocurrency days people are quite careful with it as it is still very much unknown to many and some find it difficult to understand or utilise it. This is the concern of many and this is one of the reasons why the crypto sector is still where it is, however consideration of its expansion is ongoing.
The president’s enthusiasm about bringing the country to mainstream cryptocurrency adoption is however not shared with the Central Bank. The head of Argentina’s central bank opinion is that digital assets would be a risk to the stability of the country’s economy.Â
Reasons For Saying No
According to Pesce, Bitcoin does not create value for its investors in the long run. To him, these digital assets were a commodity and not a financial asset. He talked about his plans to control and manage how Bitcoin joined and related with the country’s system of payment as well as the exchange market as he warned that this digital asset would be a great threat to the country. He stated that there is a huge fear that cryptocurrencies are being utilised to make huge gains for some individuals. The plan for a CBDC was also quashed by Pesce.
Reports taken in May showed that there has been an increase in cryptocurrency mining as it thrives, the country’s citizens make use of their less expensive energy and daily increase in price. In May also, the CB laid more emphasis on the dangers of digital currencies.
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