Argentina, a country with one of the highest crypto adoption rates in the world, saw the price of dollar-pegged stablecoins surge across exchanges on Saturday after the abrupt resignation of its Economy Minister, Martin Guzman.
The minister’s shock exit, confirmed on his Twitter account on July 3 via a seven-page letter, threatens to further destabilize a struggling economy battling high inflation and a depreciating national currency.
According to data from Criptoya, the cost of buying Tether (USDT) using Argentinian pesos (ARS) is currently 271.4 ARS through the Binance exchange, which is around a 12% premium from before the resignation announcement, and a 116.25% premium compared to the current fiat exchange rate of USD/ARS.
The local crypto price tracking website has also revealed a similar jump in other USD-pegged stablecoins, including Dai (DAI), Binance USD (BUSD), Pax Dollar (USDP), and Dollar on Chain (DOC).
Argentineans have been piling into crypto as a means to hedge against the country’s rising inflation and a continued fall of the Argentinean peso against the USD dollar.
In 2016, before inflation really took its toll, one USD was only able to buy around 14.72 Argentinean pesos. However, six years later, one USD is able to buy as many as 125.5 ARS.
The extra premium on US-dollar pegged stablecoins is the result of a law passed on September 1, 2019, called Decree No. 609/2019, which has made it virtually impossible for Argentinians to exchange more than $200 in greenbacks per month at the official exchange rate.
It was imposed as a means to prevent the Argentinean peso from free-falling amid a struggling economy. In May, the Argentinean annual inflation rate accelerated for the fourth straight month, hitting 60.7%, according to Trading Economics.
Related: Argentina carries out crypto wallet seizures linked to tax delinquents
The South American nation has the sixth-highest adoption rate globally, with around 21% of Argentineans estimated to have used or owned crypto by 2021, according to Statista.
In May, Cointelegraph reported that “crypto penetration” in Argentina had reached 12%, double that of Peru, Mexico, and other countries in the region, primarily driven by citizens seeking safe haven against rising inflation.
In addition to Bitcoin, Argentineans have been turning to stablecoins increasingly as a means of storing value in the United States dollar.
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