The recent uncertainty brought on by certain resignations by key officials of the government has led to Argentine citizens using stablecoins as a way of protecting their savings. Last weekend saw the resignation of the minister of economics of Argentina. Other personalities contributed to the chaos that caused the stablecoins price in some exchanges to increase by 11%.
Due to political uncertainty in Argentina, the dollar-to-peso exchange rate plummets
Due to current political and economic uncertainties, Argentina’s citizens have seen their exchange rate for the native Argentinian currency, the Argentinian Peso, plummet. Shockwaves were caused by the resignation of Martin Guzman as economy minister. Guzman was the main articulator of the deal that Argentina struck with the International Monetary Fund, (IMF), to restructure its existing debt.
Guzman’s resignation also led to the demission of other ministry officials, such as Ramiro Tosi and Roberto Arias. The exchange rate between pesos and U.S. dollar reached record levels on various cryptocurrency exchanges. Bloomberg reports that the Binance exchange rate was 257 Argentine Pesos, an increase of 6.6%. Prices rose 11% to 279 pesos on the Lemon Cash exchange.
Inflation and devaluation driving Argentinians towards Cryptocurrencies and Foreign Currencies
Argentinians are now rushing to change their pesos into foreign currencies such as the U.S. dollars and dollar-pegged stabilitycoins, like USDT. The market didn’t recover from its earlier rates even after Silvina Batakis was appointed as economy minister. Local media reported that the exchange rate dropped to 280 pesos for each dollar and even reached the 300 pesos mark on certain exchanges.
Additionally, stablecoin volumes traded significantly increased. Some brokers reported an increase of 500% in the volume of stablecoins traded on weekends. Many traders are trying to forecast the rise in traditional market prices to capitalize on the arbitrage opportunities.
The digital dollar exchange rate outperformed the actual dollar. It is clear that Argentinians would rather buy them than physical dollars due to ease of trade and other benefits they offer over dollar bills. According to Americas Markets Intelligence, 12% have made investments in crypto and 18% are interested.
How do you feel about recent increases in the demand for and prices of many stablecoins from Argentina? Comment below.
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