April 19, 2024
Argentina's Fiscal Reforms: Milei's Currency Move
Latest Cryptocurrency News

Peso Devaluation and Austerity: Milei’s Bitcoin Disconnect

Argentina’s newly appointed president orchestrated a depreciation of over 50% in the country’s currency and introduced austerity measures. However, Javier Milei, despite his affiliation with Bitcoin, has yet to formally integrate his enthusiasm for the cryptocurrency into governmental policies.

By reducing the peso’s value to 800 against the U.S. dollar, Milei aimed to align the official valuation more closely with the rates observed in private markets, where the peso has often traded at over 1,000 to the dollar. Notably, his administration upheld the capital controls implemented by the prior government, which had maintained the official rate at about 400.

As part of efforts to curtail government expenditure, the administration disclosed plans to refrain from renewing contracts for a year, decrease subsidies for public services like transportation and utilities, and suspend government advertising for a year. These measures garnered commendation from the International Monetary Fund (IMF), with Managing Director Kristalina Georgieva praising the actions as decisive steps toward restoring stability and rejuvenating the country’s economic capacity.

While the IMF’s commendation is noteworthy, it raises the curiosity of Bitcoin enthusiasts who had hoped that the pro-bitcoin Milei might advocate for BTC and potentially advocate for its legal tender status in Argentina. Earlier in the year, Milei had expressed skepticism toward the central bank, stating that bitcoin represents the return of money to its original creator, the private sector.

Image by freepik

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