The IMF has leveraged a $45 billion debt restructuring deal to demand the Argentinian government ‘discourage the use of cryptocurrencies’. The demand has outraged bitcoin holders in Argentina, who use BTC as a safe haven against the country’s runaway interest rates of 52%.
The restructuring deal will prevent Argentina’s imminent default of $19 billion in repayments due to the fund, granting the country a four and a half year grace period. In return, the government agrees not only to reduce its deficit and money-printing, but also to curb the use of cryptocurrencies within the nation.
For crypto users, the relevant passage of legislation is as follows:
“The National Government, for a better safeguard of financial stability, will discourage the use of cryptocurrencies in prevention of money laundering and informality, likewise the digitization of payments will have official incentives and additional protection will be given to the financial consumer.”
By approving the deal, Argentina immediately unlocks $9.8 billion of additional funding from the IMF. The country has been unable to access external funding of any kind since 2020.
Under those conditions, the IMF was effectively able to hold a gun to the head of President Alberto Fernández and his government as Argentina continues to struggle through a difficult period of long-standing financial strife.
Protests and support
The debt restructuring deal may have been approved at governmental level, but citizens took to the streets to protest and display their extreme displeasure with the latest IMF bargain.
The deal, protests and financial implications were not lost on the wider crypto industry either. Bitcoin investor Anthony Pompliano described the bill as ‘wild’ during his Best Business Show earlier this week and labelled the IMF tactics as ‘a little sneaky’.
“Now of course – this is wild. The free market should be deciding what technologies and money is used,” said Pompliano on Mar. 17.
“The people of Argentina who live in an environment with around 50% annual inflation, they realize that they need new technologies, they need new assets, they need a different path to get to a world of financial security,” added Pompliano, who was keen to state his support for the people.
“Bitcoin and cryptocurrencies serve as one of those options – they don’t want to be cut off from it. Kudos to the Argentinian people. I tend to think their voice will prevail and bitcoin and cryptocurrencies will continue to be adopted in a country that needs it most.”
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Source: https://beincrypto.com/imf-strongarms-argentina-to-discourage-cryptocurrency-use/