Argentina's National Securities Commission (CNV), the financial securities regulator for the South American country, held a meeting with El Salvador's National Commission of Digital Assets (CNAD) to jointly discuss the adoption and regulation of cryptocurrencies in the two countries. Both governments have structural liquidity problems and are in deep economic crisis due to out-of-control inflation rates.
The Salvadoran government was the first in the world to adopt Bitcoin as legal tender, as early as September 2021. Roberto Silva and Patricia Boedo, president and vice-president of the CNV respectively, met Juan Carlos Reyes, head of CNAD, to hear about the country's experience with BTC. The meeting took place on 23 May and was described as positive by both parties.
Bitcoin: Argentina like El Salvador?
In the exchange of ideas and approaches between officials, the focus remained on the case of El Salvador, since Argentina is also considering authorising the introduction of legal tender for Bitcoin. Silva admitted that he greatly admires El Salvador for how it is handling the cryptocurrency issue, which he believes all governments will soon have to deal with. Indeed, the small state had great intuition when it authorised transactions in Bitcoin, opening up its economy to a new wave of investment.
The CNV president made no secret of his desire to open up to concrete partnerships with El Salvador, exploring the possibility of opening financial agreements between the two countries. Vice-President Boedo entered into a close partnership with the less populous country back in March, attending market development meetings at the Department of San Salvador.
In her opinion, El Salvador has gained crucial experience in the cryptocurrency sector and can be a teacher for many other Latin American countries. Argentina's president, Javier Milei, who has only been in office for a few months, is enthusiastic about cryptocurrencies and has made no secret of the fact that he wants to approach the country to this frontier. With this in mind, a close collaboration with El Salvador should come as no surprise.
Will Milei's Argentina Burn the Stages?
Diana Mondino, Argentina's Minister of Foreign Affairs, had already declared in December 2023 that her government was preparing a decree to legalise the use of Bitcoin and other cryptocurrencies, under special conditions, as a means of payment. If we consider that Milei took office at the end of November, we understand well how much of a priority the issue is for the executive.
El Salvador's is a case study for many. Indeed, the Pacific Rim state adopted BTC as its official currency, amid much perplexity, almost three years ago and in this way managed to relieve its difficult financial situation. The Salvadoran president, Nayib Bukele, wants to focus on technology to get out of the hyperinflation and poverty plaguing his country. The first phase of this strategy has been the adoption of cryptocurrencies and the inauguration of the Bitcoin office, the cabinet that will regulate initiatives between pro-BTC entrepreneurs and companies.
Bukele will also eliminate all taxation related to the development of software and computer systems, with the clear intention of making El Salvador a technological and economic powerhouse. Apparently, Argentina intends to move in the same way.
Will this strategy have the hoped for success?
It is difficult to say whether this strategy will be successful, since it is still too short a time since El Salvador made Bitcoin the country's second official currency. More and more often, however, we see governments betting heavily on cryptocurrencies (and in some cases even using them to pay for acts of war), especially when it comes to developing countries without a hard currency.
We at SpazioCrypto tend to be supportive of greater development of crypto operations but, of course, we are also aware of the volatility of these currencies, which could prove devastating for countries in difficult circumstances.
Cryptocurrencies can be a flywheel of economic-financial development, but we need to welcome them into the global exchange system with clear formulas and modalities. If one hopes that they will be a quick panacea, and introduces them into the system without due precautions and limitations, one runs the risk of opening the door to the most ferocious speculation, which certainly does not aim at strengthening the economic conditions of countries in trouble.
