Argentines are flocking to purchase stablecoins to protect their savings as the peso loses value. Local cryptocurrency sources reported an increase of up to 500% in the crypto volumes moved, mostly in stablecoins like USDT, to shield incomes against the raging devaluation registered after the victory of the libertarian candidate Javier Milei in the primary elections.
Argentines Fly to Safety by Acquiring Dollar-Pegged Stablecoins
Argentines have turned to purchasing cryptocurrency amidst a raging devaluation that has tanked the peso to record low levels. According to local reports, several cryptocurrency exchanges have registered a rise in their trade volumes of up to 500%, as users seek to take cover mostly in dollar-pegged stablecoins after the victory of libertarian Javier Milei in the preliminary elections. Milei has plans to dollarize the country.
Stablecoins, in this case, give Argentines the advantage of having high availability compared to physical dollars, offering more possibilities to trade on online markets.
A market source confirmed these movements, telling Iproup that its operations grew by 300% since the announcement of the official devaluation, which took the official exchange rate to 350 pesos per dollar.
However, more established peer-to-peer (P2P) markets, like Binance and Paxful, also registered volume growth. While these platforms don’t offer official numbers, cryptocurrency trading sources estimated their operations grew by 500%.
USDT Becomes the Standard
The high demand for cryptocurrency dollars has caused exchanges and operators to purchase stablecoins in bulk at prices higher than the blue parallel exchange rate in the Argentine market. This has caused some stablecoins to be traded at higher prices than physical dollars.
USDT, the largest stablecoin in the cryptocurrency market, is also the most used stablecoin in the country, according to sources in the Argentine foreign trade market. The sources reported it became the main stablecoin sold in parallel market stores and the most transacted in P2P markets.
But USDT also serves another purpose besides being used as a hedge against inflation and devaluation in Argentina. A crypto businessman detailed that USDT was being used as a settlement currency, given the problems that Argentine importers face in obtaining access to foreign currency through standard methods. He told Iproup:
A lot of imports and exports are settled in part with USDT due to the lack of access to currencies. They also use it as a hedge because today there are no reference prices: they don’t know how much they will pay for the needed supplies.
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