In the early-2000s, the Argentine economy went through a severe crisis, causing Argentina to default on its foreign debt and place strict controls on currency. While Argentina’s economy quickly recovered over the next few years, the Argentine Peso remains famously unstable, passing through periods of rapid inflation and deflation.
Why Are Argentines Bitcoin Early Adopters?
As a result of the instability, Argentines became some of the earliest adopters of cryptocurrency in Latin America – and the world – in an effort to protect their savings against inflation. With an inflation rate of 32% per year (or higher) and a restrictive foreign exchange policy, Argentina was a prime location for cryptocurrency adoption.
Buenos Aires currently beats out most global cities for businesses that accept Bitcoin, with 6.1 businesses that accept Bitcoin per one million people, while New York has just 4.7 Bitcoin-accepting businesses per one million people. However, the Argentine government does not necessarily sanction investment in cryptocurrencies. The Argentine Parliament does recognize cryptocurrency, but they see it as property rather than currency. Bitcoin and other cryptocurrencies are currently legal in Argentina, and the country reportedly installed as many as 200 Bitcoin ATMs last year.