South American country, Argentina may have found a solution to its recurring inflation situation after all as its president, Albert Fernandez touts Bitcoin as a relevant digital asset. During an interview, Fernandez had expressed support for Bitcoin saying he was open to it. Despite this, Fernandez seems to have taken a nearly neutral stance, being careful not to fully advocate for Bitcoin legalization in Argentina.
Fernandez’s comments were in response to questions posed to him on whether he would make Bitcoin a legal tender just like its sister country, El Salvador or make active efforts at issuing a CBDC. He noted that Bitcoin trumped the Argentina Peso based on its capability of ‘nullifying inflationary tendencies.’ Although Fernandez asserted that an El Salvador-like Bitcoin legislation for Argentina should be given some thought, concerns on the risks involved and lack of a general regulatory sandbox would both be cogs in the wheel.
Head of Argentina’s Central Bank Says Bitcoin Only “Moved by Hype”
In light of President Fernandez’s comments on Bitcoin, authorities at Argentina’s central bank hold a different opinion. Miguel Pesce, Chairman of the bank took a critical swipe at digital assets, noting that they threatened the stability of economies due to their volatile nature. Pesce hinted at tightening regulatory noose on the crypto sector.
Miguel Pesce was quoted during a Digital Finance conference held in Argentina on August 10 by the Institute of Executive of Finance. On flagship cryptocurrency, Bitcoin, Pesce said value from the crypto asset is only generated by short-term momentum. He emphasized in line with Argentina’s NSC definition that Bitcoin is not a financial asset and would only suffice as a commodity.
Pesce cited the protection of retail investors as the focus of potential crypto regulations since a number of them were ignorant of the dangers of the asset class. As regards CBDC, Pesce waved off rumours on this.
Low Electricity Costs Attracts Miners to Argentina
Meanwhile, Argentina has become a hub for crypto mining, given its cheap electricity. In April, a popular Bitcoin mining firm, Bitfarms indicated its interest to move operations over to the South American country in a bid to reduce mining costs.
Back in May, El Salvador set the ball rolling for Bitcoin legalization in the South America region after it passed a law making the crypto asset a legal tender. Its decision sparked up mixed reactions both in the crypto community and traditional finance. Since then, other countries within the region such as Paraguay, Mexico, have shown similar interest. Inflation is reckoned to be a general challenge within the region. Owing to its 21 million supply cap, Bitcoin could provide a ‘safe haven’ for them contrary to Pesce’s opinions.
