December 23, 2023

Argentina Embraces Bitcoin for Legal Contracts Amid Currency Problems, Foreign Minister Confirms

Diana Mondino, Argentina's Minister of Foreign Affairs, has officially declared that bitcoin will be acknowledged as a legally accepted currency for contractual agreements within the nation.

This development comes at a time when reports are circulating about the ongoing depreciation of the Argentinian currency (ARS).

In a recent announcement on platform X, Mondino unveiled that citizens in Argentina will now have the option to utilize bitcoin for entering into legally binding contracts within the country.

Over the past few months, bitcoin has undergone a notable surge in value, experiencing an impressive 65% increase over the last three months, with a remarkable 20% spike in the past 30 days.

Moreover, Mondino mentioned that other cryptocurrencies, as well as certain commodities like specific types of food, can also be utilized in contractual agreements. She stated:

"Also any other crypto and/or commodities such as kilograms of beef or liters of milk."

On December 12, newly elected President Javier Milei announced a significant devaluation of the Argentinian currency (ARS), coupled with reductions in energy and transportation subsidies.

This decision will lead to a 50% devaluation of the Argentine peso, transitioning from 400 pesos to the dollar to 800 pesos to the US dollar.

Economy Minister Luis Caputo expressed, "For a few months, we're going to be worse than before," highlighting Argentina's "addiction" to fiscal deficits. Meanwhile, Milei emphasized that the country did not have the luxury of time to consider alternative solutions.

Argentina is grappling with an annual inflation rate exceeding 140%, coupled with a sharp decline in the value of its currency, leaving four in ten Argentines in poverty.

Over the past decade, Argentina has averaged an annual inflation rate of 40%, adding to the economic challenges faced by the nation.

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