Cryptocurrency activities have been high in countries like Argentina, which are facing high inflation. The level of uncertainty over the country’s economic future seems to have increased after the resignation of the country’s Minister of Economy, Martin Guzman. The resignation saw crypto trading activities skyrocket.
Crypto trading in Argentina rises
Cryptocurrencies have provided a safe haven for Argentinians looking for a way to preserve their wealth and protect it from depreciating fiat. Stablecoin trading volumes in Argentina have particularly increased, with Tether’s purchase price using the Argentinian Peso increasing significantly.
Inflation has been affecting Argentina for the past four decades. Dictatorship, inefficient production, and high foreign debt have affected the country’s economic growth. The Covid-19 pandemic and fuel crisis have deepened the country’s economic woes.
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Martin Guzman was appointed as the Minister of Economy in Argentina in 2019. Guzman made positive developments during his tenure, such as lowering Argentina’s public foreign debt. The minister also ensured that bonuses and food cards were available to the underprivileged.
In May, Argentina’s inflation level increased to more than 60%. This, combined with the biting shortage of diesel and pressure from the left political parties, prompted Guzman’s resignation.
Guzman’s resignation saw Argentinians shifting their savings toward stablecoins pegged to the US dollar amid increased fears of the country’s depreciating currency. The cost of buying Tether (USDT) using the Argentinian Peso increased on many exchanges. On Binance, one USDT was being purchased at around 270 ARS.
Over the years, Argentina has faced high inflation levels, and the country’s cryptocurrency activities have skyrocketed. A report by Chainalysis shows that Argentina ranked as the tenth country globally in terms of crypto adoption rate.
Cryptocurrencies and inflation
Crypto trading activities have been significantly high in countries where inflation is high. Turkey is currently facing extreme inflation levels. The country’s fiat currency has been depreciating, and the country has failed to restore it back to previous levels.
To protect their savings from the depreciation, residents in Turkey have turned towards cryptocurrencies such as Bitcoin and Tether. Stablecoins are appealing as stores of value because their values are pegged by 1:1 against fiat currencies. They are ideal stores of value for those who want to avoid exposure to the volatile nature of cryptocurrencies.
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