Argentina's Senate approved a one-time extraordinary wealth tax to combat the coronavirus pandemic by seeking to increase government revenue and target millionaires with assets of more than 200 million pesos ($ 2.5 million). At the same time, the country still faces 35% inflation.
Argentine Senate Approves New Taxes, As Bitcoin Continues To Soar Against Argentine Peso.
According to El País, the measure, citing statements from opposition parties, could "curb investments" in a country whose fiat currency, the Argentine peso (ARS), is highly devaluedagainst bitcoin (BTC) . The law aims to tax between 1% and 3% of the taxpayers' assets.
At press time, BTC/ ARS is hovering around the 1,500,850 level, out of the 1,594,196 area (all-time high) reached in early December 2020. It is worth noting that this price is not based on the parallel dollar (known as "blue dollar") that circulates in Argentina, but the official price in dollars.
In July 2019, BTC was trading at ARS 491,000, with a return of over 185% in a single year thus far. If the price is made with the blue dollar, bitcoin is currently floating at 2,712,438 ARS, according to the local exchange Ripio.
The parallel dollar is the only free exchange rate that is governed by the forces of supply and demand in the country. Although its purchase and sale in the country are illegal, the spike in price is related to the depreciation of the ARS: a currency that faces economic problems, inflationary turmoil, oversized emissions, and desperate forecasts from experts, giving BTC enough room to increase the board.
On December 5, 2020, a Bloomberg report noted that the gap between official and market-based exchange rates narrowed since October due to the government taking more "orthodox measures to boost exports. ".
Is this the end of the Argentinean peso in the Latin American people?
This is given in the context of the recent statement by the Director of the Central Bank of Argentina (BCRA) about Fiat, Carlos Hourbeigt, who stated in a recent presentation to the Argentine Chamber of Fintech that “the common enemy is the money. "
He is promoting "Transparent 3.0", an upcoming national payments network that aims to replace the Argentine peso in cash and which will be monitored by the central bank and three companies in the financial sector, including Prisma, Red Link, Interbanking, and Chelsea.
Despite the BCRA's interest in replacing money in the country, the local cryptocurrency community has taken this stance with some skepticism. Camilo Jorajuría, an Argentine legal consultant and expert in Bitcoin and blockchain issues, made the following comment through his Twitter account on the digital wallet promoted by Transferencias 3.0, raising concerns about privacy:
"The desire of regulators, local and global, is the Chinese model. Maximum population control with zero privacy. The only bitcoin fixes this."
Crypto Adoption continues surging in Argentina.
A study published by Chainalysis on September 3, 2020, analyzed the current status of cryptocurrency in Latin America and cited Argentina as one example of how its depreciation in the national fiat has gradually boosted crypto children.
The report also adds that restrictions for the amount of US. It. Dollars that Argentines can buy per month fuel the need for buying cryptocurrencies across the country, as such barriers limit their options to certain savings.
Do you think the latest tax measures only help to increase crypto adoption in Argentina? Let us know in the comments section below.
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