Main Points :
- The Argentine peso has fallen sharply—about 4.5% last week—amid political uncertainty, raising inflation and posing serious challenges to domestic assets.
- The US has proposed various stabilization tools: swap lines, direct currency purchases, buying Argentine sovereign debt.
- Bitcoiners and crypto‐advocates are skeptical that US help will address the structural issues—debt, inflation, currency mismanagement.
- Adoption of US dollar–backed stablecoins in Argentina has surged as citizens use them as real‐time hedges; Bitcoin is also gaining traction as a store of value.
- Argentina now leads Latin America in crypto ownership (~19.8% of population), especially among millennials, using crypto for savings, payments, remittances.
- A broader trend: Latin America is seeing increasing use of stablecoins and crypto as tools for financial resilience, cross‐border remittances, and in some cases as salary payments.
1. Peso Collapse and US Financial Support
Argentina is facing a rapid depreciation of its national currency, the peso, which fell approximately 4.5% in one week. The fall has been driven by political uncertainty—investors doubting President Javier Milei’s capacity to enact fiscal and structural reforms—exacerbated by corruption scandals associated with his family.
To defend the peso, Argentina’s central bank spent about US$1.1 billion over three days, but foreign‐currency reserves are limited (≈ US$20 billion), making long‐term defense challenging.
Responding to the crisis, the United States Treasury under Secretary Scott Bessent has declared Argentina a “systemically important ally” in Latin America. Available tools he mentioned include swap lines, direct currency or peso purchases, and possibly using the US Treasury’s Exchange Stabilization Fund to buy up Argentine government debt. These measures briefly improved investor sentiment, with Argentina’s stock market index (Merval, in US-dollar terms) rising over 9% and dollar‐denominated bonds rebounding.
2. Criticisms From the Bitcoin Community
Not everyone is persuaded by these interventions. Saifedean Ammous, the economist and author known for The Bitcoin Standard, has sharply criticized Milei’s governing approach. He contends that rather than solving the underlying problems, the administration is engaging in what he calls a “debt and inflation Ponzi scheme.” Key criticisms include:
- Inflation remains in the double digits, despite some decline since Milei took office in December 2023.
- Recent bond auctions required interest rates as high as 88% to attract buyers, which is unsustainable.
- The government has increased money supply heavily, despite libertarian branding.
Bitcoin‐supporters argue that these forms of external rescue—debt swapping, monetary expansion—only delay inevitable currency risks, and reinforce why a non‐sovereign, hard supply asset like Bitcoin (with its fixed supply) may be more trusted in certain segments.
3. Stablecoins as a Hedge, Bitcoin as Alternative Store of Value
As the peso erodes, Argentines are increasingly turning to US dollar-backed stablecoins (often called “crypto dollars”) to protect their savings and purchasing power.
On September 14, the local crypto trading app Lemon registered its highest daily volume of stablecoin purchases since 2024.
At the same time, Bitcoin is being seen not just as speculative, but as a store of value that in some cases is more attractive than the US dollar—especially when inflation is high and currency controls limit access to foreign currency. Gimenez of Lemon says that “currently, there are more Argentines with Bitcoin than with crypto dollars on Lemon.”
Stablecoins are also being used in remittances, cross‐border payments, and in decentralized finance (DeFi) access. Some companies are even considering paying salaries in stablecoins to protect workers from peso depreciation.
4. Demographics & Regional Trends
In Latin America, Argentina is now at the top in terms of crypto ownership, surpassing Brazil. As of August 2025:
- About 19.8% of Argentines own cryptocurrency, compared with Brazil’s ~18.6%.
- Among millennials (age ~18–35), the rate is even higher—21% hold crypto.
This reflects broader patterns in which countries suffering from inflation, weak institutions or currency instability show higher levels of crypto adoption: crypto as a method of savings, payment, remittance, financial inclusion.
5. Practical Use Cases Beyond Hedging
Crypto adoption in Argentina is moving beyond merely hedging inflation:
- Payments & remittances: Using stablecoins for remittances or payments bypasses capital controls and reduces fees.
- Decentralized finance (DeFi): Argentine users are accessing DeFi platforms via stablecoins, for yield, or financial services that local banks may not offer or may offer at worse terms.
- Salary payments in stablecoins: Some startups or firms are exploring paying employees in stablecoins to protect them from inflation and peso depreciation.
- Tokenization and custody infrastructure (though less recent in the main article): Earlier, there has been development in Argentina of cold storage custody (“bunkers”) for institutional digital asset custody.
6. What Remains to be Resolved
Despite these trends, several unresolved issues could determine whether these crypto responses are sustainable or marginal:
- Regulatory clarity: The Milei administration, though crypto‐friendly in rhetoric, still needs to develop consistent regulatory frameworks that protect investors, define tax and legal status of crypto assets.
- Fiscal discipline and structural reform: High interest rates, growing debt, inflationary policies—these need to be addressed to restore confidence beyond temporary lifelines.
- Reserves rebuilding: US$20B may sound large, but with large capital outflows, defending the peso is costly. Sustained reserve accumulation is needed.
- Currency band volatility: Even though there is a “managed float” or currency band for the peso (between ~948 and ~1,475), the band is wide enough to allow large swings; this unpredictability encourages hedging behaviour.
- Trust among citizens and institutions: Scandals like the $LIBRA memecoin promoted by President Milei (alleged rug pull) degrade public trust in crypto ventures that are politically connected.
Conclusion
Argentina’s economic predicament—characterised by high inflation, currency collapse, political uncertainty and limited reserves—has catalyzed a sharp acceleration in crypto adoption, especially stablecoins and Bitcoin. Local citizens are using them as real‐time hedges and for practical financial needs: remittances, payments, salaries. While US intervention may temporarily dampen volatility or restore market sentiment, many in the Bitcoin community argue that only deep structural reforms—fiscal discipline, regulatory clarity, trust restoration—can ensure durable stability.
From the point of view of someone looking for new crypto investment or business opportunities, Argentina’s situation suggests several areas of interest: stablecoins with strong regulatory underpinnings; platforms that enable DeFi in inflationary economies; infrastructure for custody and tokenization; and services that simplify cross-border payments or currency hedging. Close attention should be paid to how regulatory frameworks evolve, how much of the US support is realised (swap lines, etc.), and how trust in crypto projects is managed given recent scandals.
