Argentina’s stablecoin demand soars as minister resigns
Argentina's tax department has confiscated over 1,000 bitcoin wallets related to the country's delinquent taxpayers. Without KYC, 52 per cent of Argentinians are unbanked. Crypto exchanges verified the identification of clients without KYC and retained user account records and detailed financial information.
The decision comes as Argentinians continue to embrace stablecoins to battle rising inflation, a depreciating peso, and general economic gloom.
According to three leading crypto exchanges, people are trying to hedge against a future Argentine peso (ARS) depreciation, whose purchasing value has tumbled in the last year as inflation has skyrocketed.
Argentine crypto exchange Buenbit's trading volume increased by 300 per cent on Sunday compared to the same day in prior weeks, with "many people" using their DAI as collateral to secure loans in Argentine pesos and purchase additional DAI.
Following Guzman's departure, the peso fell almost 15% against the stablecoins DAI and tether on the platforms of many large crypto exchanges. Both stablecoins increased from ARS 245 to ARS 280 during the weekend.
Due to the 24/7 nature of crypto, the CEO of the Argentina-based crypto exchange Ripio noted that anytime there is one of these news stories in Argentina, it is the first market where Argentina begins to hunt for a price for the US dollar. Since many Argentinians are unbanked and without KYC, consequently raising the volume.
Also, due to a significant lack of price references for the US dollar over the weekend, most Argentine crypto exchanges widened the disparity between the bid and ask rates to 18%, which is typically about 2%.
According to the founder of the crypto education portal DefyEducation, crypto exchanges have established a large spread so that consumers do not trade and may hedge against tomorrow's opening price.
Prices rose, and spread's widened due to demand and the lack of a reference replacement price, according to the head of trading and strategy at Argentina-based crypto exchange Lemon Cash.
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Author: Emmanuel Baiden
7 years experience within the financial services sector most notably in Sales, Trading, research and writing articles within the crypto space. I have a bachelor's degree in International Business and a Master's in Investment and Risk Finance . I am also an associate member of the Chartered Institute for Securities and Investment.