During the initial Presidential debate in Argentina, Sergio Massa, the presidential hopeful and current Economy Minister, proposed the introduction of a Central Bank Digital Currency (CBDC) as a solution to the escalating inflation problem in the country.
Massa believes that adopting a digital currency could align Argentina’s economy with other advanced economies worldwide. He stated, “Our plan is to introduce a digital currency for all of Argentina. This will be complemented by a law to combat money laundering, enabling Argentinians with funds overseas to repatriate and utilize them without facing additional taxation.”
Hyperinflation is a pressing concern for every political party in the upcoming election, given that current statistics indicate an alarming annual inflation rate of 115% and a poverty rate that stands at 40%.
The Minister advocated for the initiation of a CBDC, pointing towards the evolving nature of finance and its transition to more accessible modes of trade.
“Similar to how today’s youth are inclined to transact using their phones or cards within ‘platform economies,’ we aim to make this a reality for all of Argentina,” he further commented.
Massa against dollarization
During the discussion, Massa took a moment to voice his concerns about the pro-Bitcoin stance of fellow candidate Javier Milei, who had recently suggested that Argentina should adopt the U.S. dollar as a means to counteract inflation.
He passionately appealed to the citizens’ sense of nationalism, cautioning against this approach as potentially detrimental to future policy decisions in Argentina.
“Adopting the U.S. dollar is what fuels its allure. I urge all patriots to stand by our national currency and resist the temptation to embrace the dollar,” he emphasized.
Javier Milei has consistently championed Bitcoin, vocally expressing his endorsement for the cryptocurrency. In addition to this, he has been especially critical of the Central Bank, even going as far as advocating for its total dissolution.
Milei has portrayed the Central Bank as fraudulent, and views fiat currency as a tool that politicians exploit to intentionally undermine the economy through inflation.
The nation’s election is set for October 22, with recent surveys indicating a narrow lead in favor of Milei.
Crypto community rejects CBDC move
Manuel Ferrari, a board member of Bitcoin Argentina, critiqued the decision, suggesting it’s merely a diversion from more critical problems facing the nation, such as the soaring triple-digit inflation, which he attributes to “extreme levels of corruption.”
Ferrari expressed doubts over the structure and execution of the proposed CBDC, suggesting it might primarily serve as a tactic for generating taxes.
Highlighting the significance of cash transactions in Argentina, Ferrari remarked, “Over half of Argentina’s business is conducted informally and in cash.” He warned that the CBDC initiative could potentially “undermine the backbone of our nation’s economy.”
In the United States, the idea of introducing a CBDC has been met with skepticism, with detractors labeling it as a method for the government to exert more control.
Prominent figures in the cryptocurrency realm, including legislators who are receptive to the crypto industry and Florida’s Governor Ron DeSantis, have responded strongly against perceived moves by the Biden administration that seem adversarial to the sector. They’ve vowed to counter any policies they deem to be anti-cryptocurrency.