In the wake of their most tumultuous political crisis in over two decades and an inflation rate reaching 115%, many Argentinians are turning to private cryptocurrencies, specifically the “cryptodollar” offered by Ripio, the nation’s leading digital asset platform.
This cryptocurrency provides some semblance of financial stability in a country where prices can fluctuate twice daily.
The “cryptodollar” is accessible 24/7 and emerged as a predictive metric during the post-primary election unrest.
As the unofficial foreign exchange market was inaccessible, the “cryptodollar” offered both access to robust currency and a safeguard against future unfavorable rates.
Argentina’s strict currency controls mean locals can only purchase US$200 monthly at the official exchange rate, which recently experienced a 22% devaluation.
Since the primaries, demand for the “cryptodollar” on Ripio surged fourfold, reflecting the US dollar’s over 20% leap in the unofficial market, as Ripio’s founder, Sebastian Serrano, noted to local media.
Last Friday, Ripio’s “cryptodollar” traded at 726 pesos, 5.3% lower than the 760 pesos street rate in Buenos Aires.
Its convertibility is grounded in US dollar reserves and US government securities.
Serrano mentions that Argentinians have historically treated the “cryptodollar” more as a savings mechanism than for transactions.
However, the ongoing crisis transforms this behavior, causing some merchants to halt sales due to pricing uncertainty.
Ripio, a decade-old crypto platform from Latin America, operates in several countries, with Brazil as its second-largest market.
The platform has raised over US$90 million from notable investors.
In Argentina, “cryptodollars” constitute 80% of the traded digital asset volume.
Transaction volumes in August’s first half exceeded July’s amount, projected to reach US$200 million by month-end.
Serrano believes that if right-wing candidate Javier Milei wins the upcoming election, his libertarian stance might be more crypto-friendly than leftist governments.
However, as some other countries have, Serrano does not anticipate Argentina fully embracing the cryptocurrency industry.
He believes Milei’s radical campaign promises will likely pivot to pragmatism, given the need to build alliances.
Serrano emphasizes that digital assets could be instrumental in rejuvenating Argentina’s economy.