Bitcoin News and Finance Latam Insights — Javier Milei’s Victory Divides Argentina; Bitso Launches Cross-Border Institutional Payment Service Skip to main content

Latam Insights — Javier Milei’s Victory Divides Argentina; Bitso Launches Cross-Border Institutional Payment Service

Latam Insights: Javier Milei's Victory Rips Argentina; Bitso Launches Institutional Payments Service

Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: Javier Milei’s victory in Argentina causes a devaluation maelstrom, and Bitso launches a cross-border institutional payments service.

Javier Milei’s Victory in Argentina Sparks Devaluation and Inflation Maelstrom

The victory of Javier Milei in the Argentine preliminary elections, qualified as a far-right outsider by mainstream media, has sparked a series of consequences in the country’s economy that has caused citizens to take refuge in cryptocurrency and stablecoins. Milei’s win, which polls did not foresee, has intensified the discussion of a possible dollarization of the country, which has been mentioned as key in his government plans.

Milei’s dollarization plan, which would contemplate the total conversion of deposits of public and private institutions to U.S. dollars, would also include the closure of the Central Bank of Argentina. These ideas, alongside the devaluation of the official U.S. dollar exchange rate, have led companies and individuals to hedge their savings and investments in dollars, powering the plunge of the Argentine peso, which again reached record lows of almost 800 pesos per dollar on the informal “blue” exchange rate.

U.S. dollar-pegged stablecoins, especially USDT, were in high demand last week, with trading volumes rising by 300% and even up to 500% in some instances, according to local reports.

This dollarization plan has supporters and detractors, with the latter indicating that embracing the dollar would leave Argentina without the means to control its monetary policy and the former stating that dollarization is one of the resources that can stop devaluation and inflation.

This devaluation escalation is affecting the inflation predictions of private firms, which are now anticipating inflation numbers of up to 200% for 2023. This might limit or condition the economic policies of the next government that must also deal with the debt owed to the International Monetary Fund (IMF).

This inflation rate would put Argentina among the countries with the highest inflation in the world.

Bitso Launches Cross-Border Institutional Payment Service

Bitso, a Mexico-based, Latam-focused cryptocurrency exchange, has announced the launch of a new product to ease the process of making and receiving cross-border settlements from and to Latam. Santiago Alvarado, Bitso’s Senior VP of Institutional Products, stated:

With this launch, we seek to boost the economies of our region, by facilitating operations between countries and opening trade corridors that increase the development and prosperity of Latin America.

The trial of the service allowed customers to transact more than 160 million dollars from August 7 to August 11, with 80% of these settlements completed between the U.S. and Mexico.

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