- November 25, 2023
- Posted by: legaleseblogger
- Category: Related News
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Argentina’s Economic Transformation and Bitcoin legal Tender
By accepting Bitcoin, Argentina could become attractive for businesses but also tax evaders | Credit: Shutterstock
Key Takeaways
- Dollarization and Bitcoin legal tender could boost ArgentinaÔÇÖs economy, says expert.
- Bitcoin Argentina VP calls for fulfillment of campaign promises.
- Milei is committed to revitalizing ArgentinaÔÇÖs economy by dismantling the central bank and abandoning the Peso.
Following an extensive and intense presidential campaign, libertarian contender Javier Milei emerged victorious in ArgentinaÔÇÖs presidential election on November 19. Milei, advocating for the abolition of the countryÔÇÖs central bank and presenting a series of radical policy proposals that captured the attention of the crypto community, secured the win with 55% of the electorateÔÇÖs support. With 99% of the vote counted on the declared date, Milei outpaced his rival, Sergio Massa, by three million votes.
Dollarization and Bitcoin legal Tender Could Boost the Economy
Crypto legal expert David Lesperance told CCN that dollarization in Argentina could lead to an increase in Bitcoin adoption. If Argentina dollarizes its economy, people will be more likely to hold Bitcoin as a store of value instead of the Argentinian peso, which has a history of inflation.
Lesperance also pointed out that Bitcoin is a more attractive option than other currencies in times of financial instability. He noted that people turned to Bitcoin to protect their wealth during the financial crises in Russia, Asia, and Cyprus. Additionally, Lesperance argues that Bitcoin is easier to access than other currencies in some countries. For example, he notes that it is easier for Argentinians to buy Bitcoin than it is to open a US dollar account with a US bank. Overall, Lesperance believes that Bitcoin is a valuable tool for people who live in countries with unstable economies. He argues that Bitcoin can help people protect their wealth and avoid capital controls.
Millei Facing Inflation Challenges
Upon assuming office, Milei faces the immediate challenge of reining in ArgentinaÔÇÖs soaring inflation, which skyrocketed to 143% in October. To put this into perspective, the peak inflation in the United States was 9.1% in June 2022 and has since decreased to 3.2%. The precipitous decline in the purchasing power of the Argentine peso likely influenced voters to support a candidate advocating for substantial cuts in public expenditure and a reduction in the size of the government.
Lesperance told CCN that if Argentina dollarizes its economy and accepts Bitcoin as legal tender, it could make the country more attractive to foreign individuals and businesses, as well as those who want to evade tax. However, says Lesperance, that is easier said than done. Most of these ÔÇ£crypto influencers and tax evaders do not meet necessary conditions ÔÇô staying in a low-tax country more than 183 days in a year.ÔÇØ He mentioned crypto-influencer and ex-presidential candidate Brock Pierce as a valid example of a tax evader. He argues that this could be done by offering tax incentives to those who relocate to Argentina, such as a flat tax rate or a one-time fee for residency. This could attract wealthy residents from countries with high tax rates, such as Canada and Europe. Additionally, Argentina could benefit from the spending of these individuals and businesses, which would help to boost the economy. Overall, Lesperance believes that dollarization and Bitcoin adoption could be a positive development for Argentina.
Dismantling Central Bank, Abandoning Peso, and Slashing Welfare
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