The difference between freedom and absence thereof can be measured in many ways, and none less than in Argentina’s current situation whereby public confidence is being eroded yet again by the latest in a series of overtly strict and potentially disastrous monetary policies set in place in the troubled South American country.
This week, Forex Magnates reported on the introduction by President Cristina Kirchner of the nation’s pseudo-currency, the Cedin, however there has been also a shift of interest toward Bitcoin as the net closes in on holders of US Dollars, a practice now illegal in Argentina.
On Friday last week, a Bitcoin MeetUp was held in Buenos Aires, the nation’s capital, which attracted 180 delegates, among which were organizations including BTC Global.
With the Peso undergoing yet another period of severe inflation at a rate of 20%, and now President Kirchner’s attempt to lure citizens back into the banking system over which they have absolutely no trust, by attempting to repatriate the US dollars held overseas or in hidden accounts by citizens in exchange for the domestic Cedin, the demand for Bitcoins has rocketed.
Bitcoin Value Soaring In Argentina
Compared to Argentina’s much more freedom-orientated neighbor Uruguay, values of Bitcoins in Buenos Aires are between 30% and 40% higher than just 75 kilometers away in Colonia del Sacramento, Uruguay according to Argentinian Bitcoin expert Mauro Betschart.
The nation exercises capital controls, preventing citizens from exporting their funds to Uruquay for exchange into Dollars, creating even higher demand for crypto-currencies that circumvent the domestic rulings.
Bitcoin In Everyday Use
Foundacion Bitcoin Argentina hosted this particular MeetUp, during which the discussions among participants displayed the overall view that Bitcoin is a very practical currency in Argentina, is demonstrating itself to be more stable than the Peso, and in the event that President Kirchner may succeed to relieve citizens of their safe US Dollars in place of a very unproven Cedin, a means of securing themselves against losing their money.
As a result of this gain in popularity and subsequent high value, many businesses and individuals in Argentina are accepting Bitcoins as payment options and terminating their relationships with credit card companies.
Last year, The central government’s tax agency slapped a 15% levy on credit card purchases abroad in another bid to keep dollars in the country. The 15% surcharge was also applied to debit card transactions overseas and internet purchases made in foreign currencies.
Buying dollars and other foreign currency even for the purposes of travel abroad is virtually banned. Argentinian citizens travelling abroad must request government approval to purchase dollars at the official rate, which is usually extremely unfavorable to the traveler, but extremely favorable to the government.
Travelers are usually sold 70-100 dollars for every day they will spend abroad, however it is at the government’s discretion.
Default Currency For Argentina?
If Argentinians eschew the nation’s banking system, and avoid handing their dollars over in favor of the dubious Cedin, instead adopting Bitcoins, they could go some way toward ending 70 years of successive presidents lining their pockets with the savings of their own people.
Freedom, it seems, is in the ether.