South-America crippled by inflation sees stablecoins come to the rescue

Just as Bitcoin seems to be having a hard time breaking out of the trading range between $55,000 and $65,000 in ‘uptober’, a real use case for crypto has emerged in South America in recent months.

Due to skyrocketing inflation in some countries, more and more Argentinians, Brazilians, Colombians and Venezuelans are buying stablecoins to insure the value of their savings. Tether is hyper popular over there.

Buenos Aires

Javier Milei took over as Argentina’s new president last year. For the first time in a decade, he made sure the major South American had a balanced budget. His economy continues to struggle to get inflation under control though.

Milei reduced monthly inflation from a peak of 26 percent last December to (only) 4.2 percent in August. However, prices are still up a whopping 237 percent over the past twelve months. This naturally makes other currency investments very popular. The black market in foreign currencies is booming like never before.

NEW: 🇦🇷 Argentina’s currency is losing value fast, People are using crypto to safeguard their savings.

Stablecoins are the solution for many.

Source - @chainalysis pic.twitter.com/AFaSEEidna

— Kashif Raza (@simplykashif) October 10, 2024

Bitcoin is also getting closer to official acceptance as a means of payment in Buenos Aires as more and more people buy crypto.

However, when compared to Tether, Argentinians’ purchases of Bitcoin pale in comparison. The purchase and sale of stablecoins is currently responsible for around 62% of all crypto trading in Argentina (in Brazil the figure is 60% and in Colombia even 66%).

Because Milei still refuses to release control of the exchange rate of the Argentine Peso, illegal currency trades are still increasing.