Bitcoins Soar In Value In Argentina Due To Capital Control Laws, Bitcoin MeetUp Held In Nation’s Capital

Argentina is a nation which goes from financial disaster to financial catastrophe, with governments helping themselves to funds along the way. Bitcoin values are now soaring in Argentina following the country's strict rulings on capital controls.
4 Comments

The difference between freedom and absence thereof can be measured in many ways, and none less than in Argentina’s current situation whereby public confidence is being eroded yet again by the latest in a series of overtly strict and potentially disastrous monetary policies set in place in the troubled South American country.

This week, Forex Magnates reported on the introduction by President Cristina Kirchner of the nation’s pseudo-currency, the Cedin, however there has been also a shift of interest toward Bitcoin as the net closes in on holders of US Dollars, a practice now illegal in Argentina.

avvamse__large

Buenos Aires Bitcoin MeetUp,
Buenos Aires, Argentina, July 5.

On Friday last week, a Bitcoin MeetUp was held in Buenos Aires, the nation’s capital, which attracted 180 delegates, among which were organizations including BTC Global.

With the Peso undergoing yet another period of severe inflation at a rate of 20%, and now President Kirchner’s attempt to lure citizens back into the banking system over which they have absolutely no trust, by attempting to repatriate the US dollars held overseas or in hidden accounts by citizens in exchange for the domestic Cedin, the demand for Bitcoins has rocketed.

Bitcoin Value Soaring In Argentina

Compared to Argentina’s much more freedom-orientated neighbor Uruguay, values of Bitcoins in Buenos Aires are between 30% and 40% higher than just 75 kilometers away in Colonia del Sacramento, Uruguay according to Argentinian Bitcoin expert Mauro Betschart.

The nation exercises capital controls, preventing citizens from exporting their funds to Uruquay for exchange into Dollars, creating even higher demand for crypto-currencies that circumvent the domestic rulings.

Bitcoin In Everyday Use

Foundacion Bitcoin Argentina hosted this particular MeetUp, during which the discussions among participants displayed the overall view that Bitcoin is a very practical currency in Argentina, is demonstrating itself to be more stable than the Peso, and in the event that President Kirchner may succeed to relieve citizens of their safe US Dollars in place of a very unproven Cedin, a means of securing themselves against losing their money.

As a result of this gain in popularity and subsequent high value, many businesses and individuals in Argentina are accepting Bitcoins as payment options and terminating their relationships with credit card companies.

Last year, The central government’s tax agency slapped a 15% levy on credit card purchases abroad in another bid to keep dollars in the country. The 15% surcharge was also applied to debit card transactions overseas and internet purchases made in foreign currencies.

Buying dollars and other foreign currency even for the purposes of travel abroad is virtually banned. Argentinian citizens travelling abroad must request government approval to purchase dollars at the official rate, which is usually extremely unfavorable to the traveler, but extremely favorable to the government.

Travelers are usually sold 70-100 dollars for every day they will spend abroad, however it is at the government’s discretion.

Default Currency For Argentina?

If Argentinians eschew the nation’s banking system, and avoid handing their dollars over in favor of the dubious Cedin, instead adopting Bitcoins, they could go some way toward ending 70 years of successive presidents lining their pockets with the savings of their own people.

Freedom, it seems, is in the ether.







 
More information on this subject is found in the latest Forex Magnates Quarterly Report


4 Comments on this post

Trackbacks

  1. Jon said:

    i remember running into an Argentenian in bangkok who insisted on not using an argentenian bank for even the smallest deposit.

    cars actually appreciate in that country as "real" / hard practical assets hold more value.

    July 10th, 2013 at 4:30 am
  2. Andrew Saks McLeod said:

    Yes – that makes sense to me. The internal monetary system has no credibility. Cars are an interesting benchmark. If an Argentinian wants to buy a car, and does so with US Dollars, then in three years time he sells the car, he will have to accept pesos for it. Before 2011 he could have sold it in Dollars. The trouble is that once you buy something, it immediately means the US dollar has been internalized into the Argentine system and a holder of dollars will eventually end up converting them all to pesos by living his every day life – that is if the government doesnt start prosecuting people for holding dollars or forcing them to hand them in in exchange for the Cedin. Bitcoin avoids this completely. I totally understand the Argentine demand for it, as it stops them being restricted in their purchase power, and it prevents them unwillingly exchanging their dollars for a worthless fiat currency that they will ultimately be stuck with.

    July 10th, 2013 at 5:10 pm
  3. Tate said:

    I feel sorry for the people of Argentina. I really hope that crypto-currencies can improve our lives beyond what we can now imagine.

    July 13th, 2013 at 2:30 am
  4. Jeff said:

    Indeed, it is unfortunate that bitcoin was perceived (for good reason) as a threat ultimately to the world’s reserve currency. It’s not enough that the oldest of currencies have been corralled and rendered irrelevant in the eyes of the mainstream…but the bitcoin project was shot out of the sky way before it got started.

    July 22nd, 2013 at 8:21 am

We do not store your information and we do not disclose our sources.


Leave your name/email (not required) if you'd like to be contacted about this story (will not be disclosed):



Digital Currencies

Expert Articles

Fintech, Startups & New Products

dc

Bitcoin Picks: DISH Starts Accepting Bitcoin, Illegal Firearms Sales Funded with Bitcoin

A number of developments happened during this week in the world of Bitcoins - US cable provider, DISH opened its doors to Bitcoin payments, while...

Getting approved as a nonprofit will pay dividends for your Bitcoin cause- and for Bitcoin

The ease of sending bitcoins, in any amount, all over the globe, has made it a popular medium for charitable and other causes. Hundreds of...

Non-Government Backed Financial Commission Launches Crypto Regulation  

Aiming to provide financial and compliance oversight to the world of cryptocurrencies, the Financial Commission has announced a new ‘Crypto’ division. What is the Financial...

More Digital Currencies

Juan Colon, Darwinex

Advantages And Disadvantages Of Copy Trading

Traders can collaborate with peers with the same interests, exchanging mutually beneficial trading related information. One such approach is fx copy trading, whereby “Leaders” publish...

Coffee cup and coffee beans on old wooden background

Coffee Futures: Break or a Fake?

Coffee futures can be one of the more volatile commodities around, especially during different seasons where drought concerns or frost concerns in Brazil can really...

Bart Burggraaf

Are Analytics Sites Like Alexa A Viable Measure For Web Traffic?

There are quite a few services like Alexa, including Compete, Nielsen Online, Comscore, SimilarWeb and various google tools – all are useful in some way...

More Expert Articles

FxPro Launches New In-House Developed Web Trader for MT4 Customers

Expanding its list of in-house developed technologies, FxPro has launched a new webtrader to clients. The trading platform replaces their previous version which was licensed from a 3rd party provider.
Read more

AlipayTaobaoAlibaba logo

Chinese Internet Giant Alibaba Is Set for Biggest IPO in Tech History

Towards the $200 billion Wall Street IPO in September, Forex Magnates profiles the empire behind the Chinese versions of Amazon, Ebay and PayPal. Will Alibaba be disrupting finance next as it eyes westward expansion?
Read more

More Fintech, Startups & New Products

Forex Research

Recent Comments

Note: Copyright © 2014 Forex Magnates. All rights reserved.

All materials contained on this site are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Forex Magnates. You may not alter or remove any trademark, copyright or other notice from copies of the content. All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you.Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at Forex Magnates are those of the individual authors and do not necessarily represent the opinion of Forex Magnates or its management. Forex Magnates has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur. Any opinions, news, research, analyses, prices or other information contained on this website, by Forex Magnates, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. Forex Magnates will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

©2014 "Forex Magnates Inc. - Home of the Forex Elite" All Rights Reserved.