Stablecoin transactions in Argentina have ballooned this year. High inflation combined with government-imposed currency controls — particularly restrictions on purchasing U.S. dollars — are behind the trend.
Around the world, transactions involving U.S. dollar-pegged stablecoins have soared this year. In many places, the factors behind this trend are tough to tease out. That’s not the case in Argentina, however. Argentina has always been a ripe market for cryptocurrencies, at least in theory. The nation has a history of high inflation and economic crises, and many people who live there harbor distrust of its banks and volatile national currency. But in the past year, government-imposed controls on foreign currency purchases and the COVID-19 pandemic have combined to help illustrate why the theory has legs. Put simply, stablecoins may offer a more attractive and easier-to-acquire store of value than traditional workarounds.