Crypto adoption skyrockets in Argentina as inflation surges by 276%

54

9th July 2024 – (Buenos Aires) Argentina has emerged as a frontrunner in cryptocurrency adoption, driven by the nation’s staggering annual inflation rate of 276%, according to analysts from Forbes, the American business magazine.

In an article published on 8th July, Forbes analysts highlighted Argentina’s position as the leading country in terms of cryptocurrency adoption within the Western hemisphere. Out of 130 million visitors to 55 major global exchanges, 2.5 million originated from Argentina, based on data from Similarweb.

The report also revealed that Argentina holds the top spot as the largest market for Binance, one of the world’s largest cryptocurrency exchanges. Website traffic from Argentina accounts for 6.9% of Binance’s total visits, according to SimilarWeb.

Interestingly, the surge in cryptocurrency adoption in Argentina has not been fueled by memecoins, unlike the prevailing trend in the crypto industry. Instead, locals have shown a preference for stablecoins such as Tether (USDT), as highlighted by Maximiliano Hin, Bitget’s head of Latin America. Argentines tend to acquire USDT and hold onto it, without actively engaging in other cryptocurrency transactions.

Stablecoins like USDT are designed to maintain a stable value by pegging them to a reserve of US dollars at a 1:1 ratio. Given Argentina’s significant inflation rates, holding money in stablecoins like USDT presents a sensible alternative for individuals in the country, despite the absence of comprehensive measures to protect stablecoin investors.

While Argentina has demonstrated a favorable stance towards cryptocurrencies like Bitcoin, the country faces challenges in establishing a comprehensive regulatory framework for the industry. In late 2023, following President Javier Milei’s assumption of office, Argentina officially recognized Bitcoin’s use in legally binding contracts.

Consequently, Argentina has made efforts to regulate its local cryptocurrency market by implementing registration requirements for crypto firms in April 2024. However, according to Forbes, the government’s regulatory initiatives have not yet led to the provision of regulated cryptocurrency services to the population.

The report highlighted that none of Argentina’s leading crypto exchanges, including Binance, have registered with the national securities regulator, Comisión Nacional de Valores (CNV). This regulatory gap poses ongoing challenges in ensuring a secure and transparent crypto market within the country.