Author: Hugo Finkelstein, Cryptoslate; Compiler: Songxue, Golden Finance
Inflation has hit Argentina hard. If you saved $100,000 worth of Argentine pesos in 1995, they would be worth about $310 today. According to reports,the inflation rate in November 2023 was as high as 185%.
Recently, the country’s struggling population has begun turning to cryptocurrencies as an improved method of payment and a better way to save. With Javier Milei taking office (the new “totalitarian” president),the country and its workforce are ready to redouble their efforts on blockchainto kick-start the growth the country desperately needs .
To achieve this goal, a twofold effort must be made. The country’s new government should create a friendly environment for retail crypto users and blockchain institutions. On the other hand, domestic and international companies that interact with Argentina’s workforce should promote cryptocurrencies as an efficient form of payment and transaction.
Argentina’s Booming Cryptocurrency Industry
Argentina’s population has steadily shifted toward cryptocurrency adoption. The use of stablecoins such as USDT and DAI is more popular than ever, especially through informal forex and cryptocurrency exchanges called Cuevas. Within these black markets, Argentines are constantly exchanging pesos for other currencies such as dollars and back again because they simply cannot rely on their country’s fiat currency.
Positive sentiment towards cryptocurrencies is reflected in the country’s workforce. Freelancers, who make up more than 28% of Argentina’s employed population, are driving this trend, withmany opting for cryptocurrency settlements. More than half of these 12.6 million freelancers are already paid in cryptocurrency.
Many of these freelancers will work for foreign companies and invest their salaries from abroad into the country's economy. Suppose the country’s authorities want to encourage greater capital inflows and make them more effective at stimulating growth. In this case, they should actively promote crypto payments within and outside the country’s gig economy.
Crypto-friendly leader
Argentina’s attitude is lucky for crypto-friendly workforce , President Milley’s blockchain-friendly stance on the issue is unusually supportive for a world leader. He has previously said, “Contracts between individuals are the basis of markets.” These words encapsulate his vision of a market-driven economy in which contracts between individuals replace bureaucratic procedures — the blockchain An ideal situation for the chain to thrive.
In another quote, he expressed his forward-looking stance on a more decentralized future:
“We have to understand that central banks are a scam. Bitcoin Coin represents the return of money to its original creation - the private sector."
Millay proposed promoting a dollar-based economy and abolishing "fiat currency" laws. Enable the free use of currencies and digital assets, including stablecoins and cryptocurrencies. As Argentina makes this potentially painful move toward the U.S. dollar, cryptocurrencies will be the perfect intermediary partner to promote to the population throughout the process, as long as payment and transaction channels are open.
Mi Lai has already done a good job in his previous actions. In December, he legalized contracts for Bitcoin and other cryptocurrencies. Companies working with Argentina’s workforce should follow suit and offer these alternative payment channels to workers who need them. Those companies that do this will be able to collaborate with a wider pool of talent and profit from this innovation.
Future Prospects
The benefits of using cryptocurrencies for employees and employers in Argentina are manifold. For workers, cryptocurrencies can serve as a hedge against inflation, ensuring their income retains its value. Employers benefit from reduced complexity in international transactions and less reliance on the country's traditional and unstable banking system.
Still, the path to widespread adoption of crypto payments is not that clear. Domestic businesses need to promote the use of cryptocurrencies as a legitimate means of payment and transactions. At the same time, governments need to continue to create an atmosphere conducive to these changes so that the crypto workforce can flourish and attract more national growth.
Argentina’s efforts to penetrate the use of cryptocurrency into the general workforce will be more than a financial experiment; it is a strategic move towards economic recovery and stability. As long as the government and Argentinian industry allow this to happen, the country is expected to set a precedent for using cryptocurrencies to revitalize the economy.
If these changes occur, cryptocurrencies could become not only an alternative to Argentina’s workforce but also a beacon of hope and stability.
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