Argentina Overview. Located in the southern part of South America, it is the second largest country in Latin America after Brazil. With an area of 2.78 million square kilometers, it ranks eighth in the world in terms of territory and is the second largest country in Latin America after Brazil. It has a coastline of more than 5,000 kilometers and a continental shelf area of nearly 1 million square kilometers. The capital of Argentina is Buenos Aires. The population is 45 million.
Argentina's current economic situation. In August 2023, the National Institute of Statistics and Census of Argentina released the latest economic statistics report, saying that the inflation rate in July reached 6.3%. The cumulative inflation rate so far this year is 60.2%. The cumulative inflation rate in the past 12 months has increased to 113.4%.
In July, among all kinds of goods and services in Argentina, the price of telecommunications services increased the most, reaching 12.2%, followed by cultural products and related services, which increased by 11.2%. The price of basic food and medical services increased by 9%.
Faced with soaring prices and rising living costs, many Argentines have been forced to tighten their belts and have gradually figured out various tricks under the heavy pressure.
First, many Argentines have developed a habit of spending in advance. As prices rise rapidly, saving money may mean paying a higher price for the same goods in a few months or even weeks, so stocking up in advance can save a lot of money. In addition to trying to buy enough for the family's immediate needs at one time, they also stock up on some goods that are not easy to expire, such as toilet paper and canned food. These long-term storage items can be used for personal use and can also be resold to friends and colleagues after the price increases to earn the difference.
Current political situation in Argentina.
On August 13, Argentina held the primary election for the 2023 general election. Millet, the presidential candidate nominated by the far-right Freedom and Progress Party, led with 31.57% of the votes.
Milley has radical views and a tough style, which has a great influence on voters who are disappointed with the status quo, especially young people. The economic propositions he put forward during the campaign were very exaggerated. He proposed to replace the troubled peso with Bitcoin, make the Argentine economy completely encrypted, and said he would "burn" the central bank that mismanaged the economy. In addition, he also emphasized other more radical views such as "climate change is a lie."
Milley, 52, is an economist and a member of Congress. He often wears a leather jacket, has a messy hairstyle, and sings rock songs loudly to his supporters. As a presidential candidate, Milley's ideas are as alternative as his image. In addition to wanting to abolish the central bank, he also holds some far-right political views.
Milley's neoliberal views, such as allowing the market to regulate the operation of the economy, have a large market in Argentina. Before the primary election, he had 20% to 30% support, and today's voting results are similar.
In Millet’s view, the creation of the central bank in 1935 was the beginning of all Argentina’s problems. Without the central bank, Argentina was the richest country in the world, and from 1880 to 1935, inflation averaged only 0.9% per year. The creation of the central bank in 1935 fooled the people, and inflation jumped to an average of 6% per year. The central bank was nationalized in 1946, and by 1991 inflation averaged 250% per year. It was a complete disaster.
Milley, who was trained as an economist and economic analyst, supported the Austrian School of Economics, was a staunch supporter of laissez-faire capitalism, and called himself an anarchist.
In the field of blockchain, the Austrian School is not a strange concept. The founder of the Austrian School believes that money is not an invention of the state. Hayek's "Denationalization of Money", a must-read book for the Austrian School in the circle, also clearly expresses that the government and the monetary system must be completely separated. The viewpoint of the book was considered shocking in 1974, but the emergence of Bitcoin in 2009 made it a great prophecy. Satoshi Nakamoto himself is very likely to be a liberal based on the Austrian School.
In Mille's vision, Bitcoin will become legal tender after the country's central bank is closed as a remedy for Argentina's inflation. Before the presidential campaign, Mille traveled on multiple talk shows, often promoting the benefits of Bitcoin and cryptocurrencies, and even claimed that Bitcoin could eliminate the central bank.
Milley's unconventional positions resonate with many, especially younger voters who are internet-savvy and technology-savvy.
Argentina has been on the rise in cryptocurrency usage since around 2020, with many people starting to buy Bitcoin and stablecoins. To send money to family and friends abroad, or to buy goods from abroad, more and more people are using cryptocurrencies as a way to preserve value, under the influence of global economic integration.
Cryptocurrency is completely legal in Argentina, and most young Argentines prefer Bitcoin, Ethereum and stablecoins. Mile’s bold vision and radical reforms are supported by most young groups, but at the same time, they face strong resistance from many large institutions, authorities and social forces.
The characteristics of cryptocurrency are decentralization, resistance to regulation and autonomy. Mile's preference for cryptocurrency is adapted to the specific conditions of the current Argentine economy. Long-term inflation and distrust of the government have caused the endless depreciation of legal currency and driven ordinary people to turn to decentralized crypto assets.
Global cryptocurrency adoption.
On June 9, 2021, the Congress of El Salvador officially voted to pass the Bitcoin bill, becoming the first country in the world to declare Bitcoin as legal tender.
On April 23, 2022, the African country of the Central African Republic became the second country in the world and the first in Africa to use Bitcoin as legal tender.
On October 7, 2022, Dominica adopted Tron as legal tender, becoming the third country in the world to adopt cryptocurrency as legal tender.
On November 21, 2022, the Prime Minister of Saint Kitts and Nevis, Drew, stated that Bitcoin Cash will be listed as legal tender before March 2023, making it the fourth country in the world to list cryptocurrency as legal tender.
The "Policy Declaration on the Development of Virtual Assets in Hong Kong" was officially released on October 31, 2022.
On November 29, 2022, the Brazilian House of Representatives recognized Bitcoin and cryptocurrencies as legal means of payment and financial assets.
In the past, the volatility of Bitcoin did make investors tremble with fear. As more and more countries adopt Bitcoin as legal tender, and more and more investment institutions and individuals invest in Bitcoin as a means of asset preservation and appreciation, the volatility of Bitcoin has become smaller and smaller. Cryptocurrency is more suitable for countries with political turmoil, severe inflation, and war. At the same time, in order to win the support of young people, politicians vigorously promote the advantages of cryptocurrency to add points to their campaigns.