President-elect of Argentina Javier Milei ran on a promise of economic change. The shape of the transformation will only become known after his inauguration on Dec. 10, but stablecoins will play an important role in Argentinians’ financial lives no matter what happens, Ripio CEO Sebastián Serrano told Cointelegraph en Español.
Argentina’s crypto community has responded with great enthusiasm to the election of the former economics professor, Serrano said. Argentina-based cryptocurrency exchange Ripio saw a 180% rise in new users in October and a 110% week-on-week increase in new users on Nov. 19, the day of the runoff election that brought Milei to power.
The excitement was also reflected in the flurry of trading activity with the U.S. dollar-pegged UXD stablecoin, which Ripio launched. UXD lost its peg on Nov. 17-18 and also saw an astounding high of $5.03 that weekend, according to CoinGecko.
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Stablecoins already play a key role in Argentinians’ financial lives, and that may be even more so in the future, whether or not Milei follows through with his plan to fully dollarize the economy. Serrano said:
“With the difficulties in accessing both banknotes and bank dollars, stablecoins have become indispensable for many companies and individuals. […] If we move towards dollarization or bi-monetarism, but with little accessibility to dollars, stablecoins will continue to become more and more important.”
Serrano suggested that the Central Bank of Argentina needed to be put in order or replaced by a similar body, rather than being eliminated, as Milei has promised. Without a central authority, there could be “a very chaotic monetary flow,” as has been seen in Argentina in the past. That is another fundamental reason for the use of stablecoin in Argentina and other Latin American countries.
Proof of Voto pic.twitter.com/1vtbObXfUO
— Sebastián Serrano (@sserrano44) November 19, 2023
Annualized inflation in Argentina hit 143% in October. The country ranks 15th in the Chainalysis Global Adoption Index.
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