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Pro-Bitcoin President Javier Milei: Zero Currency Issuance In Argentina Approved

Last Updated July 1, 2024 1:49 PM
Teuta Franjkovic
Last Updated July 1, 2024 1:49 PM

Key Takeaways

  • Javier Milei is advancing Argentina’s economic strategy to a “zero monetary issuance” phase to tackle inflation.
  • Milei is proposing significant tax reductions and a series of financial reforms.
  • Emphasizing a pro-cryptocurrency stance, Milei supports the use of Bitcoin and advocates for currency competition.

Javier Milei, Argentina’s libertarian President and Bitcoin advocate, has announced  new policies aimed at solidifying the economic successes his administration has achieved.

In a recent interview, he explained that following the approval of the omnibus law , Argentina is now entering the second phase of its economic strategy, which includes implementing a policy of zero monetary issuance.

Next Recovery Steps – Zero Monetary Issuance

Argentina is making progress with its economic recovery strategy. President Javier Milei recently outlined the forthcoming initiatives his administration will undertake to consolidate the progress the economy has made so far.

In an interview , Milei indicated that following the passage of the omnibus law, which alters numerous crucial aspects of the nation’s legal framework, the next objective is to tackle the issue of monetary issuance in order to address the problem of inflation effectively.

He stated:

“The zero deficit stage has already passed, now we are going to the zero issuance stage. Of course, now the change in the monetary regime is coming. Basically, what we aim for is that the broad monetary base does not vary.”

Previously, Milei had expressed his intentions to halt central bank money issuance, announcing in February plans to introduce a bill to Congress that would criminalize money issuance, including the imposition of jail time. This proposed legislation would classify seigniorage as a criminal offense, holding any officials accountable for authorizing it, including the president, liable to face incarceration.

The bill  mandates that all previously undeclared assets up to $100,000 (that were not regulated before) will not incurr a government fee. For assets exceeding this threshold, the government offers preferential rates that vary based on the declaration date.

Specifically, assets declared before September are subject to a 5% fee on amounts over $100,000. This rate increases to 10% for declarations made between October and December. Declarations made in the first quarter of 2025 will incur a 15% fee. All fees must be calculated and paid in U.S. dollars.

Milei Eyeing Nobel Prize Amid Inflation Success

President Milei also declared  an upcoming series of tax reductions  aimed at boosting the competitiveness of the Argentine economy. One of the most significant cuts will eliminate the “country” tax, which currently adds a 30% surcharge to purchases made by Argentines in foreign markets.

Milei cited Ireland as a model for Argentina’s economic recovery. He pointed out that Ireland, once considered the most miserable country in Europe, has made a substantial recovery. However, Milei emphasized his vision for Argentina to go even further, aiming to make it the freest country in the world, which he believes will also make it the richest.

Argentina recently began to see initial successes in its battle against inflation, with a private consulting firm reporting that inflation for food and beverages stalled at 0% during the third week of June. Milei hailed this milestone, proclaiming that his administration is revolutionizing economic theory. He also mentioned that if these efforts prove successful, they could potentially earn him a Nobel prize.

Advocating for Currency Competition in Argentina and Bitcoin Usage

Milei recently clarified Argentina’s currency strategy via social media, particularly in response to a mention of Bitcoin. Milei affirmed that his policy of currency competition would allow for the use of Bitcoin, along with other units like WTI, BTU, or any unit deemed suitable for individual business needs.

He stated :

“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…”

He emphasized that any accounting issues arising from this diverse currency regime could be addressed using the functional currency model.

Previously, Milei had announced intentions to penalize currency issuance with jail time and proposed the dollarization of the Argentine economy, which was a key promise during his election campaign.

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