However, after Milei won, it seems everybody, including Elon Musk himself, believed that Argentina was facing a brighter future.
Milei and his triumph in Argentina sparked discussions about his plan to eliminate the national currency, potentially paving the way for the official and unofficial dollarization of the country, aligning with the prevailing preference for the US dollar in the local economy.
The people of Argentina have long sought the stability and trustworthiness offered by the US dollar, leading to an increased usage of stablecoins in the country.
Chainalysis, a blockchain analysis firm, has recently reported that Argentina is at the forefront of Latin America in terms of raw transaction volume in cryptocurrencies, recording over $85 billion in value received in the year leading up to July 2023. Notably, stablecoins contribute to approximately 31% of Argentina’s modest retail-sized cryptocurrency transaction volume.
Milei’s ascent suggests a potential shift towards a dollarized Argentina, both in an official and unofficial capacity. However, a notable and often overlooked factor is Milei’s strong advocacy for Bitcoin.
In a previous interview, Milei expressed :
“With legal tender, they scam you with the inflationary tax… Bitcoin is the natural reaction against central bank scammers; to make money private again.”
While a complete transition to a Bitcoin standard in Argentina may pose significant challenges, considering even El Salvador has struggled to replace US dollars for transactions, there might be an alternative perspective.
In investor Anthony Pompliano’s interview with Michael Saylor, the latter emphasized the potential coexistence and strengthening of both US dollars and Bitcoin.
Saylor then remarked :
“If I had one request from the Bitcoin community, my request would be – focus your guns on gold. Ultimately, gold is being de-monetized. This is not speculation on the part of Michael Saylor. You have all the stats. It has been de-monetized for the past decade. It doesn’t have a country. It doesn’t have an army. It doesn’t collect taxes. There is not a single person on earth that is going to lie down in front of a tank to protect the nation of gold. And yet, gold is the enemy. Because gold is a dumb rock. You can’t mortgage your gold. You can’t lien on your gold. It is hard to rent your gold. Or license it. Or develop it further. Gold is not big tech. You can’t put gold on your iPhone.”
Perhaps, for Argentina, the path forward involves embracing both US dollars and Bitcoin, recognizing the significance of each in the current landscape. This nuanced approach could mark a new era in economic thinking tailored to the demands of the 21st century. While the journey may encounter bumps along the way, the necessity for change is becoming increasingly evident.
As we approach the 2024 Presidential election in America, this evolving economic landscape should be considered. Several candidates have already expressed strong support for Bitcoin, indicating a potential scenario where US dollar dominance continues alongside the embrace of Bitcoin as a digital gold.