Crypto news from Argentina: the President postpones dollarization.

Crypto news: the president of Argentina, Javier Milei, in a recent interview, rejected the option of implementing his dollarization plan during 2024. 

In particular, Milei stated that, although dollarization and free currency convertibility are the ultimate goals of his administration, implementing them within the current year would be impractical to clean up the country’s economy.

Let’s see below all the details. 

The analysis of the choice of the president of Argentina and its impact on crypto dynamics

As anticipated, the president of Argentina, Javier Milei, is scaling back the implementation of his libertarian reforms. 

The closure of the Central Bank of Argentina (BCRA) and the replacement of the fiat currency, originally key promises during his presidential campaign, will have to wait until at least next year to be implemented.

In a recent interview with local media, Milei explained that the sanitization process of the BCRA is proceeding more slowly than expected. Furthermore, the closure could only occur at the end of June if the current pace were maintained. 

Not only that, he also indicated that the adaptation of the financial system model will require a significant amount of time, potentially up to a year.

However, Javier Milei has confirmed that dollarization and the withdrawal of the Argentine peso remain fundamental objectives of his administration.

He mentioned the relatively small size of the Argentine monetary base as a factor that will facilitate the implementation of dollarization. 

Finally, he emphasized that he has received reports suggesting the possibility of supporting dollarization of the country with the current dollar reserves.

Milei has clarified that, even though the liquidation of the BCRA could occur in dollars, the American dollar may not be the final currency of Argentina.

Therefore, he suggested the possibility of a ‘basket of currencies’, with specific sectors of the economy using different currencies based on their activities. This approach, he stated, would neutralize the effects of the monetary policy of a single country.

The issue of dollarization has not been discussed with the International Monetary Fund (IMF). 

However, the organization has recently approved a disbursement of 4.7 billion dollars as part of a refinanced payment plan for Argentina’s 44 billion dollar debt.

Milei Challenges Argentina’s Political Order 

In Argentina, the debate on controversies is heated, while President Javier Milei leads a courageous reform initiative that has divided the country. 

After a heated and prolonged debate, Argentine legislators have approved the complete package of reforms proposed by Milei, marking a significant milestone. 

This legislative triumph is just the beginning, as the bill now heads to the Senate for a decisive showdown.

The rise to power of Javier Milei has been driven by the widespread frustration with the tumultuous economic situation in Argentina. 

With an inflation rate of over 200% and poverty affecting 40% of the population, Milei’s bold economic reforms, including a significant devaluation of the peso and drastic reductions in subsidies, represent a courageous move. 

However, these reforms are not immune to criticism. Detractors, like opposition deputy Leandro Santoro, evoke the memory of the 2001 crisis as a stern warning about the dangers of unrestricted market reforms.

As the nation finds itself at this delicate crossroads, the International Monetary Fund (IMF) has supported Milei by approving a substantial $4.7 billion bill for Argentina, signaling international confidence in its reform agenda.

La Rioja relies on ‘Bocades’ to “survive”

The situation in the province of La Rioja, however, tells a different story. 

The province, heavily dependent on fiscal redistribution and with a significant portion of its workforce employed in the public sector, is in serious trouble. 

This pushes Governor Ricardo Quintela to take radical steps. 

With a courageous gesture, Quintela has launched the local currency “bocades”, almost a currency destined to tackle the fiscal problems of the province, integrating public salaries and facilitating local transactions.

However, this initiative did not go unnoticed. Both economists and critics question the feasibility of introducing a provincial currency in an economy already grappling with hyperinflation. 

In particular, highlighting the potential risk of further monetary chaos. Furthermore, the national government has declared the initiative illegal, putting at risk the already fragile relationship between La Rioja and the central administration.

Despite the challenges, Quintela remains firm in his position, arguing that the bocades could offer much-needed economic stimulus for the province. 

However, skepticism persists and many fear that this experiment could exacerbate the financial instability that afflicts Argentina.