This week, Javier Milei, the libertarian, pro-Bitcoin president, completed a year in office in Argentina. But what has changed so far in the country’s shattered economy, with annual inflation reaching nearly 300 percent?

Argentina's first economist president has managed to drastically reduce inflation in the South American nation. In April of this year, annual inflation was around 290%. In October, the rate was 107%. This is the latest figure from the Milei government.

Monthly inflation fell from 25% per month to 2.7% per month. Despite the positive data, more than five million people have fallen into poverty since the libertarian took office. According to the BBC, this is the biggest jump in poverty since the economic crisis of 2001-2002.

But how is the crypto market in Argentina today?

Sebastián Serrano, CEO & co-founder of Ripio, outlined the crypto landscape in this first year of Milei's government. Ripio is currently one of the most popular Bitcoin wallets in Argentina. Therefore, Serrano has more than just formed opinions. He has data to support his discussion on the subject.

The co-founder of the Argentine exchange recalls the expectations created in the crypto universe, since “the politician declared on several occasions his admiration for the cryptocurrency market.”

This, of course, raised hopes that the Argentine government would become a major supporter of the sector and an important agent in increasing the adoption of crypto assets, Serrano points out. However, this scenario has not come to fruition. At least not yet. “However, there is a lot of expectation that the next steps of the current government will include more dedicated measures for the crypto world,” predicts Sebastian.

Milei made progress on macroeconomic issues. The administration managed to stabilize the price of the local currency, the Argentine peso, which indirectly impacted the crypto market. This economic indicator was important in reducing the pressure from the population for the dollarization of the economy and reducing the need for Argentines to buy US dollars.

It is also important to highlight that, in addition to balancing the relationship between the parallel currency market and the official market, Milei's administration also managed to prevent a situation of hyperinflation throughout the year, an evil that has affected the Argentine population many times throughout history.

For comparison purposes, in December 2023, inflation reached 25.5% and a total of 254% in the previous twelve months, Serrano highlighted.

Argentina a market for stablecoins

Another extremely relevant factor for the Ripio commander is the use of stablecoins by Argentina. According to data from Chainalysis, activity with stablecoins in Argentina is 17% higher than the global average and the share of these assets in the country's transactions was 61.8% between July 2023 and June 2024.

Sebastian explains that Argentina's history of economic instability has led many people to adopt these cryptocurrencies as a way to protect themselves from inflation and the devaluation of the peso, in addition to having a capital reserve tied to the value of the US dollar.

At Ripio, specifically in Argentina, we have seen a growth of around 150% in the use of stablecoins, when comparing the period of Milei's first government (December 2023 to date), with the previous period, between December 10, 2022 and December 9, 2023.

Shy crypto policy

Regarding cryptos, although the president has not yet implemented any policy dedicated directly to the industry, the government has carried out a ‘blanqueo’ – a process that allows people to declare previously unregistered assets to the tax authorities, so that they can be used legally in the future, in exchange for paying a reduced tax.

Even though this is a measure that has already been applied in other historical periods, this was the first time that it was possible to include crypto assets, thanks to a decision by the current government. At Ripio, we even saw users carrying out the ‘blanqueo’ of cryptocurrencies on our platform. In the same vein, Cedears’ approval of cryptocurrency ETFs in Argentina was great news at the end of the year.

For the crypto sector and community, this represents a new stimulus (as well as the “blanqueo”) that shows that the strength of this ecosystem can no longer be ignored, says the co-founder of the crypto exchange.

Rent paid in Bitcoin in Argentina

Another innovative aspect that emerged in this first year of government was the possibility of signing rental contracts in cryptocurrencies, a phenomenon that arises from the Necessity and Urgency Decree (DNU) that revoked the Rent Law.

For example, the first Bitcoin contract was signed for the rental of an apartment in Rosario (ARG), with monthly payments equivalent to US$100. This modality allows immediate, secure and flexible transactions, using cryptocurrencies such as BTC or stablecoins, such as USDT.

Milei intends to launch sandbox for RWAs

The CEO also highlighted the government’s ongoing project to create a ‘sandbox’ focused on real world assets (RWA) and asset tokenization.

This could have a major economic impact and boost the Argentine capital market, which has historically never been very relevant. The creation of a blockchain stock exchange would give many companies access to financing, which would boost the country’s economic growth.

Future should be more generous with crypto

Looking ahead, I believe that the most important decision Javier Milei’s government should make would be to change the restrictions imposed on the crypto sector by the previous government. There are still restrictions imposed by the Central Bank, for example, so that banks cannot trade crypto. The same goes for payment processors, explains Sebastian Serrano.

With this in mind, we can conclude that changing this scenario would be a great demonstration of support for the crypto ecosystem. Regarding Argentina’s specific perspective, the expectation is that the population will start to demand real growth in the country’s economy after this first year of greater stability.

Based on what he has observed throughout his first year in office, Serrano said he is optimistic that Milei will be able to demonstrate that the new policies can produce significant economic growth, including crypto assets. The executive is optimistic about the crypto future of the neighboring country.
 

The article Milei Government completes one year and crypto market in Argentina advances little was seen for the first time on BeInCrypto Brazil.