Bitcoin Traders In Argentina Are Restricted From Purchasing US Dollars

Argentina, troubled by soaring inflation, is looking to keep crypto investors from trading USD. This is seen as an attempt by the central bank to stem capital flows and tame inflation.

In an announcement on Thursday, the country’s central bank said those who bought Bitcoin or any other digital asset in the past 90 days with pesos would not be able to access the free exchange market (Mercado Único y Libre de Cambio — MULC) and buy dollars at the official rate.

The idea is to prevent money from leaving the country — this can quickly be done with cryptocurrencies and dollars. If a person or company has pesos in their account and they use them to buy US dollars from a regulated exchange, they can use those dollars to invest in cryptocurrencies like Bitcoin.

This means that the USD will, in a sense, leave the country, harming the Argentine economy. In the South American country – home to Latin America’s third-largest economy – President Alberto Fernandez is tightening currency controls and raising interest rates to keep inflation in check.

Argentina has the highest inflation rate in the world. According to the central bank, annual inflation in the South American country is 64%. That’s the second-highest in the region after crisis-stricken Venezuela, the country with the highest inflation rate in the world.

Cryptocurrency grows in Argentina due to the country’s inflation rate: Bitcoin is arguably a better bet than the Argentine peso, which is rapidly losing value as a currency. Bitcoin miners have long claimed that the asset acts as a hedge against inflation as the supply of the digital currency is capped at 21 million.

In May, Argentina’s largest bank, Buenos Aires-based Banco Galicia, launched a cryptocurrency service for customers, making Bitcoin, Ethereum, USD Coin, and XRP available for purchase — a service that can be purchased. may not be expected today with new central bank restrictions.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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