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Pro-Bitcoin President Javier Milei Promotes Free Competition Among Cryptocurrencies in Argentina

Published June 20, 2024 2:08 PM
Teuta Franjkovic
Published June 20, 2024 2:08 PM

Key Takeaways

  • President Javier Milei supports integrating Bitcoin into Argentina’s economy, advocating for free currency competition.
  • Milei’s pro-Bitcoin stance has gained support from key figures in the crypto community.
  • Despite regulatory challenges and criticism, Milei remains determined to push forward with Bitcoin adoption.

In a recent statement , Argentine President Javier Milei reaffirmed his support for integrating Bitcoin (BTC) and other currencies into the national economy.

His vision advocates for free competition of currencies, giving citizens the freedom to choose their preferred monetary units.

Milei Backs Bitcoin to Revitalize Argentina’s Economy

Since taking office last December, President Javier Milei has been focused on revitalizing Argentina’s economy. He views digital currencies, particularly Bitcoin, as potential solutions. Milei highlights  Bitcoin’s limited supply and growth model, asserting that it can provide people with greater control over their finances.

His tweet said: 

“There will be free competition of currencies so if you want to use Bitcoin there will be no problems… and you can also use other units such as WTI, BTU and the one that is most appropriate for your business… In accounting terms, it is solved by the functional currency method…”

Milei’s statement was in response to Gabor Gurbacs, former Director of Digital Asset Strategy at VanEck, who replied  to his introductory tweet with “Bitcoin for all.” Milei confirmed that his administration would promote free competition for currencies, including Bitcoin, as well as units like West Texas Intermediate (WTI) and British Thermal Units (BTU).

Milei’s pro-Bitcoin stance has garnered enthusiastic support from the Bitcoin community. Notable figures, including Gurbacs and El Salvador President Nayib Bukele, have expressed their approval. Additionally, Elon Musk has shown interest  in Argentina’s economic progress, further validating Milei’s approach.

Challenges in Bitcoin Adoption Amidst Inflation and Tax Issues

From a different perspective, Milei’s statement appears inspired by Nayib Bukele’s administration in El Salvador, which has permitted the free circulation of Bitcoin. However, Argentina faces unique challenges compared to El Salvador, including persistent inflation and tax uncertainties surrounding cryptocurrencies. Additionally, there is a significant preference for stablecoins as a means of payment in Argentina.

El Salvador’s experience with Bitcoin provides important insights. A survey  by Yale School of Management’s David Argente, Diana Van Patten, and Fernando Alvarez of the University of Chicago revealed that despite various incentives, Bitcoin and the Chivo Wallet app have not achieved widespread adoption among Salvadorans. This indicates that convincing citizens to embrace new payment technologies is a significant challenge.

Globally, central banks are exploring digital currencies to enhance financial inclusion and payment efficiency. Countries like the Bahamas, Jamaica, and Nigeria have already launched their digital currencies. However, Bitcoin stands out due to its decentralized nature, differing fundamentally from central bank digital currencies (CBDCs).

Milei Advocates for Bitcoin in Argentina Amidst Regulatory Backlash

Despite these challenges, Milei remains determined to integrate Bitcoin into the Argentine economy in his own unique way. In December 2023, the Minister of Foreign Affairs, International Trade, and Worship confirmed that the government would allow contracts in Bitcoin, boosting confidence within the crypto community.

However, Milei’s administration has also faced criticism. In the first quarter of 2024, the crypto community, including voices from El Salvador, criticized Milei for yielding to pressure from the Financial Action Task Force (FATF) and enacting stricter regulations for Virtual Asset Service Providers (VASPs).

Argentina’s move toward free currency competition has the potential to significantly impact its economy, especially amidst high inflation and economic uncertainty. The true effects of these measures will become evident in the coming months.

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