Argentina, the country with the highest crypto adoption rate in the world, saw the price of dollar-based stablecoins surge across exchanges on Saturday following the sudden resignation of its economy minister, Martin Guzmán.
Minister’s shock exit was confirmed by him Twitter Through a seven-page letter dated July 3, high inflation and depreciating national currency threaten to further destabilize a struggling economy.
According to data from Kryptoya, the cost of buying Tether (USDT) using the Argentine Peso (ARS) via the Binance exchange is currently 271.4 ARS, a nearly 12% premium from before the resignation announcement, and compared to has a premium of 116.25%. The current legal exchange rate for USD/ARS.
The local crypto price tracking website has also revealed similar jumps in other USD-pegged stablecoins including Dai (DAI), Binance USD (BUSD), Pax Dollar (USDP), and Dollar on Chain (DOC).
Argentina has been hoarding crypto as a means of hedge against the country’s rising inflation and the continued decline of the Argentine peso against the US dollar.
In 2016, before inflation really took its toll, one USD was able to buy only 14.72 Argentine pesos. However, after six years, one can buy USD up to 125.5 ARS.
The additional premium on US-dollar stablecoins is the result of a law passed on September 1, 2019, called Decree No. 609/2019, which made it possible for Argentines to exchange more than $200 in greenbacks per month made almost impossible. exchange rate.
It was imposed as a means of preventing the Argentine peso from free-falling in the midst of a struggling economy. According to Trading Economics, Argentina’s annual inflation rate accelerated for the fourth consecutive month in May, reaching 60.7%.
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According to Statista, the South American nation has the sixth-highest adoption rate globally, with around 21% of Argentina estimated to be using or owning crypto by 2021.
In May, Cointelegraph reported that “cryptocurrency penetration” in Argentina had reached 12%, twice that of Peru, Mexico and other countries in the region, mainly by citizens seeking a safe haven against rising inflation.
In addition to bitcoin, Argentina is increasingly turning to stablecoins as a means of storing value in the US dollar.