- Javier Milei advocates bitcoin use and free currency competition in Argentina.
- Despite the criticism, Milei remains committed to integrating cryptocurrencies into the Argentine economy.
OUR TAKE
This announcement could have far-reaching implications for the future of the Argentine economy, especially in terms of cryptocurrency adoption and regulatory strategies around the world. The Milley government’s stance reflects his optimistic view of the potential of cryptocurrencies, while also reflecting the country’s complex situation in dealing with economic challenges and tax policy uncertainty.
–Revel Cheng, BTW reporter
In a recent statement, Argentine President Javier Milei reiterated his support for using bitcoin and other currencies in the national economy.
What happened
Milei’s statement was a response to Gabor Gurbacs”, former Director of Digital Asset Strategy at VanEck, who replied to his greeting tweet with ‘bitcoin for all.” Milei assured his administration would allow free competition for currencies, including bitcoin and other units such as West Texas Intermediate (WTI) and British Thermal Units (BTU).
From a different perspective, Milei’s statement can be seen as inspired by Nayib Bukele’s administration in El Salvador, which has allowed the free circulation of bitcoin. However, the Argentine context is slightly different from El Salvador.
The country struggles with inflation from previous years and the tax uncertainty associated with cryptocurrencies. Additionally, Argentina has a marked preference for stablecoins as a means of payment.
Despite these challenges, Milei remains determined to institutionalize more bitcoin in the Argentine economy, albeit more “in his own way.” In December 2023, the Minister of Foreign Affairs, International Trade and Worship confirmed that the government would allow contracts in bitcoin, which has consolidated hope in the crypto community.
Also read: 5 countries and regions leading the adoption of bitcoin
Also read: Trump’s bitcoin pivot: A political maneuver
Why it’s important
Milei’s administration has also faced criticism. In the first quarter of 2024, the crypto community, including El Salvador, gave Milei harsh feedback for bowing to pressure from the Financial Action Task Force (FATF) and establishing a law for stronger regulation of Service Providers of Virtual Assets (PSAV).
“There will be free competition of currencies, so if you want to use bitcoin, there will be no problems. And, you can also use other units such as WTI, BTU, and the one that is most appropriate for your business. It is more accounting-wise; it is resolved by the functional currency method,” Milei stated.
This policy faces challenges and risks. High inflation and economic uncertainty could erode market confidence in cryptocurrencies, causing them to fluctuate in value and impact domestic consumption and investment. In addition, governments need to put in place effective regulatory measures to ensure that free competition in currencies is not abused or destabilize the financial system.
