Argentinian CBDC Proposal and Election Dynamics

Latest News
Martin Walker
Oct 4, 2023 at 06:47 am

Argentinian presidential hopeful Sergio Massa has expressed a strong commitment to introducing an innovative digital currency issued by the central bank, known as CBDC (central bank digital currency), should he secure the position. His aim is to comprehensively address Argentina's persistent and pressing inflation dilemma, which has lingered for a considerable period.

During a spirited presidential debate on October 2, the second-leading candidate in the country articulated, "I am acutely aware of the formidable challenge posed by inflation in Argentina." He then went on to lay out a detailed strategy for effectively tackling the nation's widespread and escalating inflation:

Our strategic plan involves the nationwide launch of a digital currency in Argentina, complemented by the introduction of tailored legislation facilitating the smooth repatriation of funds held abroad. This would empower individuals to utilize these funds freely and without any additional financial encumbrances.

Massa, the current Minister of Economy, firmly rejected the notion of adopting the United States dollar as Argentina's official currency. He emphatically stated, "Opting for dollarization only serves to perpetuate the allure of this foreign currency. It is of utmost importance that we, as a nation, uphold the integrity and usage of our national currency, resisting the endorsement of the U.S. dollar."

Argentina's eagerly anticipated general elections are scheduled to take place on October 22.

According to the findings from two out of three major opinion polls, Massa is currently trailing slightly behind Javier Milei, a fervent supporter of Bitcoin and a vocal critic of central banks, who emerged victorious in Argentina's primary elections in August.

Argentinian voter preferences across three separate polls. Source: AS/COA.Argentinian voter preferences across three separate polls. Source: AS/COA.

Insights gleaned from the American think tank AS/COA suggest that Massa is expected to garner significant support, particularly in the Buenos Aires province, which is home to a substantial portion of the nation's population—approximately 16.6 million out of the total 46 million inhabitants. Conversely, Milei seems to enjoy the majority of support in the more rural and less populous areas of the country.

Milei has expressed keen interest in adopting the U.S. dollar as Argentina's official currency. With a background in economics and libertarian principles, Milei has long been an outspoken skeptic of central banking and has made a significant campaign promise to dismantle Argentina's central bank.

Furthermore, Milei has previously lauded Bitcoin as a significant response against what he calls "deceptive central bank practices," arguing that the Argentine peso enables politicians to manipulate the public through inflation.

Intriguingly, Patricia Bullrich, Argentina's third-most prominent presidential candidate, has reportedly outlined her intentions to advocate for a dual-currency system. In this envisioned system, both the Argentine peso and the U.S. dollar would coexist as legal tender, should she emerge victorious in the election.

Value of the Argentine peso denominated in U.S. dollars since 2003. Source: Google Finance.Value of the Argentine peso denominated in U.S. dollars since 2003. Source: Google Finance.

Since December 2023, the Argentine peso has witnessed a staggering depreciation of over 99% against the U.S. dollar, illustrating the extent of the economic challenges faced by the nation.

Compelling and robust data consistently supports the assertion that Argentina's inflation rate is among the highest globally, with only Venezuela and Lebanon surpassing it in this regard.

You might also like: 3AC Hedge Fund's Su Zhu Apprehended in Singapore Amid Bankruptcy Proceedings

Related News

Sign up for daily crypto news in your inbox

Get crypto analysis, news and updates right to your inbox! Sign up here so you don't miss a single newsletter.