A recent government announcement buried the possibility of digital weight, an initiative born in the times of Sergio Massa as a presidential candidate. Javier Milei rejected it, taking into account that in Argentina invests heavily in crypto dollars (mainly USDT), registering twice as many purchases as the rest of the region.
Milei closes the digital weight
The Government decided to end the current contract for the production of $1,000 and $2,000 bills at the Mint. This was confirmed by the presidential spokesperson, Manuel Adorni, who described this process as “nonsense inherited by the previous administration that refused to issue higher denomination bills in line with inflation.”
This measure, added to the appointment of an auditor in the entity and its eventual closure, caused a stir both in the financial sector and in the general public. The $1,000 and $2,000 bills, with the faces of Ramón Carrillo and Cecilia Grierson, had been put into circulation in May 2023 to meet the growing demand for cash.
But The intervention of that space seems to definitively close the door to a Central Bank Digital Currency (CBDC, for its acronym in English), in which a “digital weight“. A proposal that was highly promoted by Massa.
“It is logical that a government with the current ideology has decided to take a step back with this initiative. Even Trump spoke out against CBDCspromising that he will never create one in the United States if he wins the next elections,” he tells iProUP Nicolás Verderosa, expert in cryptocurrencies and artificial intelligence.
For Verderosa, CBDCs demonstrate the interest of States in the crypto ecosystem and can drive broader adoption. But “they are completely centralized and, therefore, They go against the fundamental purpose of crypto, which seeks the opposite: decentralization and the possibility of operating between peers (P2P) without intermediaries“.
According to official sources, the constant delays in production by the Mint led the Central Bank to take this drastic measure. The objective is to speed up the introduction of the new $20,000 bills into circulation and continue producing the $10,000 bills. to meet the cash needs of the economy.
Crypto dollar boom in Argentina
A recent Chainalysis report revealed that Argentina has already surpassed Brazil as the country with the highest adoption of cryptocurrencies in Latin America. This phenomenon is largely explained by the increasing use of stablecoinsdigital stablecoins pegged to assets like the US dollar.
Julián Colombo, director of Bitso Argentina, celebrates the milestone and highlights iProUP the growth potential of the sector in the country: “Cryptocurrencies, that emerged as an option to preserve value and access opportunities that the traditional system did not offer, They continue to be today, and increasingly, highly sought after by Argentines.“.
According to the study, the volume of transactions in stablecoins in the country is significantly higher than the world average. The Argentines accumulated a “crypto cushion” of more than $91 billion in the last year, turning the country into one of the largest crypto dollar markets globally.
The BRICS digital currency
Recently, BRICS countries took a significant step towards the creation of an independent payment system. BRICS Pay platform offers new blockchain-based debit cardseeks to reduce dependence on the US dollar and offer an alternative to Western payment systems.
The BRICS ambition goes beyond a simple payment card. The bloc’s leaders are also exploring the possibility of creating a common digital currency backed by gold, called Join. In fact, a render of the bill has already circulated which has on the front the flags and iconic monuments of the member countries (Brazil, Russia, India, China and South Africa), but also “friendly” nations on the back, among which is Argentina.
Argentina, present on the back of the BRICS banknote
“It is an initiative aimed at strengthening economic cooperation between member countries“, he comments to iProUP Héctor Lucero, technology specialist.
The first South American country targeted for a trial of BRICS Pay is Brazil. Although Argentina, for obvious political reasons, is not on the front line, experts do not rule out that in a future of free competition of various tools the arrival of this novelty could occur.