President of Argentina is Ready to Support Bitcoin
The current President of Argentina expressed his opinion regarding Bitcoin and a central bank digital currency (CBDC). On August 12, Alberto Fernandez indicated support for digital assets during an interview with Caja Negra. There is no reason to push back against the emerging asset class according to Alberto Fernandez.
He responded to a question about whether he would consider exploring a central bank digital currency (CBDC) or even recognize Bitcoin as legal tender. His answer shows the current President of Argentina the importance of cryptocurrencies.
Inflation is one of the biggest challenges in Argentina, so it is not surprising that he mentioned inflation. It was a defining issue for the administration of the country’s previous leader, businessman Mauricio Macri. The official data indicates that 100 Argentine pesos from the period when Macri left office, would be worth the equivalent of 661 pesos as of August 12.
The country’s leader mentioned increasing perceptions of Bitcoin as a hedge against inflation in the broader global economy. Nonetheless, he also cautiously noted that it is still very early days for the cryptocurrency sector. It would take time to make cryptocurrencies popular according to Fernandez.
Bitcoin, Fernandez, and the country’s central bank
In spite of his openness to exploring digital assets, it won’t be easy to solve all challenges. For example, the head of Argentina’s central bank appears to be threatening a crackdown on the industry.
Bitcoin mining is quite popular in Argentina as citizens take advantage of cheap electricity and soaring crypto prices. This spring, the country’s central bank reiterated warnings to citizens regarding the risks associated with crypto assets.
During the Argentine Institute of Executive of Finance’s Digital Finance Forum Miguel Pesce made a comment about cryptocurrencies. Miguel Pesce described cryptocurrency as a threat to economic stability. He claimed that Bitcoin fails to generate value for investors outside of short-term hype cycles. The head of Argentina’s central bank also likened Bitcoin to a commodity. Pesce came to the conclusion that Bitcoin “is not a financial asset” as defined by Argentina’s National Securities Commission.
He also expressed his desire to regulate the intersection of Bitcoin with the payment system as well as the exchange market. Pesce also warned that cryptocurrency could be very detrimental to domestic financial stability. The head of the country’s central bank also dismissed the suggestion that Argentina would explore a central bank digital currency.
