Argentine citizens are hedging their savings using stablecoins amid the recent climate of uncertainty created by the resignations of some key members of the government. The country’s economy minister resigned along with other celebrities over the past weekend, triggering an uproar that led to a 11% rise in the price of stablecoins on some exchanges in the country.
Dollar-to-peso exchange rate declines due to political uncertainty in Argentina
The rate that citizens use to exchange the Argentine peso, the native fiat currency, for the dollar in Argentina has fallen due to the climate of political and economic uncertainty the country currently faces. The resignation of Economy Minister Martín Guzmán caused a shock wave, as he was one of the biggest performers of a deal struck with the International Monetary Fund (IMF) to restructure the country’s debt.
Guzmán’s resignation also led to the dismissal of other important officials in the ministry, including Ramiro Tosi, Roberto Arias and Rodrigo Ruette. This pushed the peso exchange rate for the US dollar to record numbers on various cryptocurrency exchanges. According to Bloomberg, the rate reached 257 Argentine pesos on the Binance exchange, an increase of 6.6%. On the Lemon Cash exchange, the price jumped 11% to 279 pesos.
Inflation and devaluation is driving Argentina to foreign currencies and crypto
This situation has caused Argentines to rush to exchange their pesos for foreign currencies such as the US dollar, and also for dollar-pegged stablecoins such as USDT. Even with the appointment of a new economy minister, Silvina Batakis, the market did not recover from its previous rates. According to local media, the exchange rate fell even lower to 280 pesos per dollar, even reaching the 300 pesos per dollar mark on some exchanges.
In addition, the trading volume of stablecoins has increased significantly. Some operators reported a 500% increase in trading volume during certain hours of the weekend, with most traders trying to anticipate growth in traditional markets to take advantage of arbitrage opportunities.
The exchange rate of the digital dollar exceeded the exchange rate of the physical dollar, indicating that Argentines preferred to buy these types for other goods due to the simplicity of re-trading them and the dollar bills by them. Also for different uses to be done. The movements are in line with a survey conducted by Market Intelligence of America in April, which found that 12% of the population has invested in crypto, and 18% are interested in investing in crypto.
What do you think about the recent increase in demand and price of multiple stablecoins in Argentina? Tell us in the comments section below.
image credit: Shutterstock, Pixabay, WikiCommons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation or recommendation or endorsement of an offer to buy or sell any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the Company nor the author is responsible, directly or indirectly, for any damage or loss alleged to be caused by or in connection with the use or reliance on any content, goods or services mentioned in this article.