Central Bank of Argentina bans bitcoin holders to buy USD
Credits: Central Banking

Central Bank in Argentina prohibits digital asset investors from buying dollars

Argentina’s problem with inflation!

Argentina is a country which lies in the southern part of South America. In terms of area covered, Argentina is also the second largest country in South America after Brazil. One of the major problems that the country faces is the problem of inflation. Previously, the inflation rates were running at around 50%.

Since 2022 begin, there have been lot of altera

Argentina's inflation
Credits: Moneycontrol

tion in the economy of the nation and it is noted that, the inflation is set to hit 70% and is going to challenge the president Alberto Fernandez to cope up with the situation. The four big scenarios that could take place due to the current inflation are Hyperinflation and Government Failure, political stability with relatively high inflation, Electoral defeat without political crisis, Success on Inflation by the government.

As a measure to fight the rising inflation in the country and to prohibit the flight of capital from the country, the central bank tries to prohibit digital asset investors from buying USD.

The Central Bank’s attempt.

According to announcement, the investors who have brought any kind of digital asset, which also includes bitcoin, using pesos will not be allowed to access single free exchange market and buy any dollars at the official rate.

The prohibition is enacted as an attempt to not allow the currency to leave the country, which can be easily achieved by the trade of cryptocurrency. In case an investor is in the country and has pesos with him, he can get the currency exchanged with USD at any regulated exchange and use the same to buy bitcoin. This will see that pesos leaves the country and due to high percentage of movement out of the country, the value of the currency might rise staggering causing inflation.

Argentina is the third-largest economy in Latin America; as a result, the countries that border it will be significantly impacted by its high inflation rate. According to statistics, Argentina has the second-highest inflation rate in South America and one of the highest inflation rates in the world, at 64 percent.

Writer’s Analysis:

We all know, cryptocurrency is big in Argentina, but the current rising inflation rates demands the government to take stringent steps to save the economy from collapsing. Though the decision made by the central might not be a popular one, it seems that the decision is for the country’s economy’s development.


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