Soon after the announcement made by the country’s central bank to take action to tighten controls on the movement of foreign currency, the Argentina peso plunged by more than 10%. Officially the peso pegged at 72 per US dollar, but it touches the bottom of 145 for a greenback on the black market.
The latest increase to Bitcoin and Cryptocurrencies in a country leads to a drop in the price of the country currency, which is the biggest currency challenge facing for more than a century.
BCRA (the Board of the Central Bank of the Argentine Republic) has justified the new actions in a statement that is released on its Spanish language website saying that they are an effort “to promote a more effective allotment of foreign currency.” In simple words, it says:
A mechanism is established by the Federal Administration of Public Revenues (AFIP), which is about the collection of taxes on income and on personal properties at a rate of 35% for external asset formation operations by individuals as well as on purchases in foreign currencies through debit and credit cards.
The newly taken measures aim to preserve the existing quota of 200 dollars per month, whereas discouraging foreign exchange and card spending.
Due to the country’s unstable external debt levels, Argentina is in its third year of economic crisis. The confession made by the Board of the Central Bank of the Argentine Republic (BCRA) is that the servicing of these responsibilities has an undesired influence on the country’s exchange rate.
The new measures also call for the establishment of guidelines for the discussion of private external loans that are compatible with the exchange market.
However, Argentina, together with Venezuela, are the two Latin American countries that are previously reported by the news Bitcoin.com that their currencies are losing their value due to the immoderate printing of money which causes inflation.
The Chainalysis study ranks Argentina as the country having the third highest value of cryptocurrency under 3 billion dollars which are received between July 2019 to June 2020.
In the meantime, several Argentine citizens responding to the announcement made by BCRA agree with the idea that the newly taken measures will push more towards cryptocurrencies. A journalist Emiliano G. Arnáez was one of the citizens who share this view. Emiliano tweeted that Bitcoin can be an alternative that his countrymen can use during the successive Argentinian economy crises.
In his remarks, Arnáez touts how the main attributes of bitcoin make the digital currency a better alternative to the country’s fiat currency.
Keep in mind that Bitcoin has its central banks. There is no stock with stablecoins, and there are no currency exchange restrictions with cryptocurrencies.
All the comments that are given by the Argentine Citizens confirm Villanueva’s previous declarations that all the people want a safe system to store their money and there are no porters in crypto.