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President of Argentina open to Bitcoin and a CBDC, but central bank says no

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In an interview with Caja Negra, the President of Argentina answered the question whether Bitcoin will be introduced into the country’s financial system; as it done, for example, in El Salvador, where Bitcoin recognized as legal tender.

Bitcoin can provide investors with inflation protection

As the President said; he has no reason yet to abandon the use of Bitcoin in the country’s financial system in the future. Moreover, it can be beneficial, since the main problem of the Argentine economy is that it has hyperinflation. According to statistics, Argentina has one of the highest inflationary spirals in the world, second only to Venezuela.

The Argentine economy was once one of the best on the continent; but now the country is under severe inflationary pressures. Argentina has tight currency controls, and the dollar reigns in the black market.

According to the President, cryptocurrencies should treated with caution; since little time has passed for their full-fledged introduction into the global financial system, and this factor you must take into account.

Over the past 2 years, the demand for cryptocurrencies has skyrocketed in Argentina, which is not surprising. Because Bitcoin can provide investors with protection from high inflation, the Argentine peso is constantly depreciating. In addition to Bitcoin, Argentine traders also use stablecoins such as DAI.

It is clear that the head of state is trying to find mechanisms to improve the economic situation in the country; and Bitcoin may well be suitable for this purpose. At the same time, the head of the Central Bank of Argentina, Miguel Pesce, points out that; in his opinion, Bitcoin cannot be considered a profitable asset for investment and should not be expected to profit from it in the long term.

Argentina’s central bank opposed to Bitcoin

The Central Bank of Argentina (BCRA) wants to avoid any link between bitcoin and the foreign exchange market.

“We are going to regulate all possible intersections of bitcoin with the payment system and the foreign exchange market”; said the president of the bank, Miguel Ángel Pesce.

In his opinion, Bitcoin should be excluded from new solutions and not considered as a means of payment. Despite the president’s openness to exploring digital assets, the head of Argentina’s central bank appears to be threatening to crack down on the industry. Pesce dismissed speculation that Argentina would create the digital currency of the Central Bank.

“We intend to leave the role of the only regulator for the Central Bank. Individuals now involved in this function. They distribute the system, develop technology platforms and monitor the execution of transactions”.

Determining the legal status of Bitcoin and the prospects for using BTC in the country’s economy have already considered by the previous administration of Argentina. However, the matter did not progress further than discussion and mutual claims of the regulator and the government.

Whose point of view will win in the end now? Perhaps the head of state will be able to convince the Central Bank officials, and they will begin to develop mechanisms for introducing Bitcoin and other cryptocurrencies into the country’s financial system. An additional factor of success may be the situation in El Salvador, if Bitcoin can finally strengthen there, then this may prompt the conservative financial circles of Argentina to change their point of view.

Perhaps Argentina will become another country where Bitcoin will be the legal tender.

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