USD stablecoin premiums surge in Argentina following economy minister’s resignation

Must read

Pending Home Sales Improve In January As More Buyers Return

More demand from buyers and less supply from homeowners is holding prices steady. getty The housing market is showing early signs of recovery with...

Biden-⁠Harris Administration Announces New Actions To Protect Renters And Promote Rental Affordability

The Federal Trade Commission has issued a request for information exploring unfair practices in the ... rental market. getty The Biden-Harris administration announced...

A 5-Minute Fix for People Who Sit All Day

A growing body of research tells us that sitting for too long is bad for our health. It has been linked to obesity,...

8 Topics to Tackle If You Want to Survive Retirement With Your Spouse

wavebreakmedia / Shutterstock.com This story originally appeared on NewRetirement. Before you got married, you probably discussed where you wanted to live, whether or...

Argentina has been in a long-standing battle against rising inflation and a continued decline of the peso against the U.S. dollar.

1201 Total views

22 Total shares

USD stablecoin premiums surge in Argentina following economy minister’s resignation

Argentina, a country with one of the highest crypto adoption rates in the world, saw the price of United States 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 Sunday 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.

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 U.S.-dollar pegged stablecoins is the result of a law passed on September 1, 2019, called Decree No. 609/2019, and 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.

More articles

Latest article

Pending Home Sales Improve In January As More Buyers Return

More demand from buyers and less supply from homeowners is holding prices steady. getty The housing market is showing early signs of recovery with...

Biden-⁠Harris Administration Announces New Actions To Protect Renters And Promote Rental Affordability

The Federal Trade Commission has issued a request for information exploring unfair practices in the ... rental market. getty The Biden-Harris administration announced...

A 5-Minute Fix for People Who Sit All Day

A growing body of research tells us that sitting for too long is bad for our health. It has been linked to obesity,...

8 Topics to Tackle If You Want to Survive Retirement With Your Spouse

wavebreakmedia / Shutterstock.com This story originally appeared on NewRetirement. Before you got married, you probably discussed where you wanted to live, whether or...

How to Overcome the 8 Biggest Challenges of Remote Work

Arts Illustrated Studios / Shutterstock.com Editor's Note: This story originally appeared on FlexJobs.com.Are you ready to dip your toes into the world of...