Argentina's Milei, So Far Shunning Bitcoin, Devalues Peso by More Than 50%

The government's official rate is now 800 pesos to the dollar versus roughly 400 previously.

AccessTimeIconDec 13, 2023 at 3:39 p.m. UTC
Updated Mar 8, 2024 at 6:38 p.m. UTC
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Argentina's recently elected president devalued the nation's currency by more than 50% and announced spending cuts, but, possibly to the dismay of cryptocurrency enthusiasts, Javier Milei did not – yet, at least – turn his enthusiasm for bitcoin (BTC) into an official government policy.

In slashing the peso's value to 800 per U.S. dollar from less than 400, Milei is mostly bringing the government's official valuation in line with that of private markets, where the peso lately has often traded at more than 1,000 to the dollar. Notably, though, the Milei administration has done nothing to lift the capital controls imposed by the previous government that allowed it to cap the official rate at about 400.

Among the moves to lower government spending, the administration announced that contracts of less than a year will not be renewed, reduced subsidies for public transportation, electricity, gas and water, and canceled government advertising for one year.

The moves drew praise from the International Monetary Fund (IMF), with Managing Director Kristalina Georgieva saying she welcomed the "decisive measures," calling them "an important step toward restoring stability and rebuilding the country's economic potential."

The IMF praise is sure to raise the antennae of bitcoin fans who hoped the libertarian Milei might prove friendly to BTC and perhaps even go as far as pushing to make it legal tender in that country. "The central bank is a scam," said Milei earlier this year. "What bitcoin is representing," he continued, "is the return of money to its original creator, the private sector."

A year and a half ago, Argentina borrowed $45 billion from the IMF with one of the stipulations being that the government take steps "to discourage the use of cryptocurrencies with a view to preventing money laundering, informality and disintermediation."

Edited by Nick Baker.


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Stephen  Alpher

Stephen Alpher is CoinDesk's managing editor for Markets. He holds BTC above CoinDesk’s disclosure threshold of $1,000.

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