Bitcoin (BTC) volume in Argentina pesos has risen exponentially since the crypto-currency crash in 2018, as the country faces a possible default on foreign debt of $65 billion.
Arcane Research posted data to Twitter showing that since January 2018 Bitcoin’s weekly volume purchased with Argentine pesos has jumped 1028 percent. However, BTC and USD volumes also showed significant increases of 407% and 139% respectively.
This surge is happening “as the government is about to default on its debt and the currency is suffering from inflation.”
Argentina’s government has yet to put forward a way for the country to restructure foreign debt at around $65 billion, leading to a possible default. On April 22, Buenos Aires missed scheduled payments totalling $500 million on three foreign bonds, which triggered a countdown to a formal mid-May default.
Why are so many investors turning to BTC within the South American nation? The answer may be the same reason not so many in the U.S. got on board with cryptocurrency when the COVID-19 pandemic starts.
BTC Appetite Due to Argentina’s Financial Crisis, Coronavirus’ Global Economic Impact
Argentina’s financial crisis — besides the coronavirus’ global economic impact — is in dire straits compared to those in other countries, causing many around the world to turn to cryptography as a reliable asset uncorrelated with legacy markets. Any measures used to stabilize Argentina’s economy could potentially cause the peso to deflate.
As the CEO of lending platform Celsius Network said, “A bet on Bitcoin is a bet that the deflationary pressures will win.”
Cryptolydian reported earlier that, Argentina’s central bank is testing a decentralized blockchain to improve banking procedures, the Daily Hodl website reported.
South American blockchain firm IOV Labs has stated that its proof-of-concept will process debit claims of banking customers through a licensed blockchain network.
Other large commercial banks in Argentina took the same move such as Banco de la Provincia de Cordoba, BBVA and Banco Santander.