When far-right libertarian candidate Javier Milei took a surprise lead in the race to become Argentina’s next president in August, crypto fans could have been forgiven for thinking that there was another political heavyweight on the scene poised to extol the virtues of digital currency.
After all, he once dubbed the central bank “a scam,” and had, as reported by news outlet Rest of World, previously claimed that “Bitcoin represents money’s return to its original maker: the private sector.”
He has also been vocal in his support for alleged crypto Ponzi CoinX.
However, any excitement about his presumed pro-crypto stance may have been a little premature. Indeed, according to Rest of World, his plans may even depress crypto adoption.
The issue, it claims, lies in his commitment not to cryptocurrency but to a policy of dollarization and its ramifications for crypto of replacing the Argentinian peso with the US dollar.
Crypto is particularly popular in Argentina with about a third of the population using it on a daily basis. However, unlike in many other countries that primarily use digital currencies as an investment tool, Argentinians have been using it as a store of value. This has been necessary due to rampant inflation and tight controls on US currency entering the country.
However, if Milei’s program of dollarization were to come to fruition and foreign currency became easier to procure, this would render the need for widespread crypto use in Argentina redundant.
Argentina’s crypto adoption has even exceeded that of El Salvador which, at the behest of its president Nayib Bukele, adopted it as an official currency two years ago.
However, the approach favored by Milei is very different to that favored by Bukele. El Salvador’s leader, for example is very much centred on Bitcoin adoption while Milei has historically been a champion of crypto in general. Not only that, Bukele has been a vocal critic of the idea of dollarization.