Inflation-weary Argentines continue to bank on Bitcoin

BUENOS AIRES: In the Crypstation cafe in downtown Buenos Aires, trendy young Argentines order their lattes and pastries surrounded by screens with real-time cryptocurrency price quotes and a huge neon Bitcoin logo. The bill can be paid in digital money, too.

Savers in the South American nation are increasingly being drawn to cryptocurrency to offset years of painful inflation, now running near 60% shrugging off a recent market crash and El Salvador’s troubled experiment with virtual tender.

“The local environment is pushing people to protect their capital in cryptocurrencies and so we see growth speeding up,” said Mauro Liberman, 39, one of the founders of the cafe, which is aimed at promoting the use of digital tender. “Throughout Latin America the growth potential is enormous,” he said, adding that most local users were buying it as a way to hoard their savings. “It is an avalanche that won’t be stopped.”

An April report from Americas Market Intelligence showed crypto penetration in Argentina was 12%, around double the level of Mexico and Brazil. Adoption in hyperinflation-plagued Venezuela is even higher, according to a recent Chainalysis report. The draw is a lack of confidence in the local peso currency, which has depreciated 14% this year against the dollar. Capital controls limiting foreign exchange to $200 monthly are also spurring crypto adoption. Annual inflation rose to 58% in April and could go as high as 70% this year, a rate which makes crypto attractive, despite the recent crash which has seen stablecoins like TerraUSD and Tether slide, and bitcoin drop to a 16-month low.

Local crypto platforms like Lemon Cash and Buenbit said their user base had ballooned over the last year. The central bank has warned repeatedly about the risk of investing in volatile digital currencies.

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