Source: Alexey Novikov / Adobe
Argentina’s newly elected leader, Javier Miliei, has struck down forced legal tender laws forcing Argentinians to settle debt obligations in specific currencies, enabling use of alternatives like USD and Bitcoin (BTC).
The rule comes attached to a sweeping executive order repealing over 300 laws, aiming to deregulate and rebuild the Argentinian economy. It also fuliflls one of Miliei’s chief campaign promise to enable local currency competition and help “dollarize” the nation.
“It is necessary to respect the will of citizens to agree on the forms of cancellation of their obligations to give sums of money, without distinction of the legal tender or not of the currency that is determined,” read a translated version of the decree on Wednesday.
The nation’s minister of foreign affairs clarified on Thursday that contracts can now be “agreed in Bitcoin,” alongside virtually any other crypto or physical good including “kilos of steer or liters of milk.”
Though not explicitly targeted towards crypto, industry influencers view the bill as a step along the path toward Bitcoin (BTC) adoption, a currency proponents claim can help members of unstable economies escape hyperinflation.
The asset has a programmatic supply cap of 21 million coins, unlike the Argentinian peso, whose supply rose by an equivalent of 20% of the nation’s GDP under the previous administration’s rule.
.@JMilei has legalised the use of all foreign currencies in Argentina, including #Bitcoin. Not every country has to make Bitcoin legal tender; each country will have their own unique path. All roads lead to @BTC. https://t.co/boGtke21Em
— Samson Mow (@Excellion) December 21, 2023
Argentina’s Inflation
Indeed, inflation in Argentina surpassed 100% per year since February and shot up to 160% after Miliei got elected last month. Meanwhile, BTC is up 1000% against the peso year to date, despite still being down 36% from its all-time highs against the U.S. dollar.
Milieu made countering inflation and government largesse a focal point of his campaign and lamented the state of the currency in his latest order.
“Given that monetary policy acts with a lag that ranges between 18 to 24 months, even if money is no longer issued today, we Argentines will continue to pay the costs of the monetary disaster of the outgoing government,” he declared.
Milieu asserted that the government is on track for 15,000% annual inflation given the liabilities of the central bank and that there is “no alternative solution” to the problem besides economic deregulation.
To the Bitcoin community’s delight, Miliei has advocated for the elimination of the country’s central bank, and called Bitcoin a “natural reaction against central bank scammers.”
Javier Milei is running for President of Argentina.
He appears to understand money, and that inflation is an unfair mechanism that advantages elites over the people and slowly robs people of their means of survival. pic.twitter.com/tj0KEztUzI
— Alex Stanczyk ∞/21m (@alexstanczyk) January 5, 2023
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