The Milei era once again put the issue of dollarization of the economy in Argentina on the table and, beyond the debates, reality shows the preference of Argentines to save in that foreign currency. At the end of 2023, the INDEC set the record of USD 256,591 million that would be “under the mattress”, along with a year-on-year increase of USD 10,000 million.
Along with this growing phenomenon, during 2023 savings in digital dollars also grew exponentially, from Cryptomarket – Latam’s pioneering exchange platform -, for example, recorded monthly increases in investments in digital dollars or stablecoins (especially USDT) of between 50% and 70%.
And although this trend is estimated to continue in 2024, the diversification of savings in other cryptocurrencies such as Bitcoin and Ether (from the Ethereum network) is already being observed, but also the search for investments in real economy tokens, as a method to safeguard value and generate extra profits.
Why is crypto adoption so massive in Argentina?
According to Chaynalysis ‘ 2023 global crypto adoption index, the country is second in Latam after Brazil and fifteenth worldwide. The reasons may be several, but the constant devaluation, one of the highest inflations in the world, added to the restriction of accessing the dollar, have forced the common citizen to have to learn about virtual wallets and digital dollars. But there is an additional reason, Argentina has been building a strong and talented IT ecosystem.
Its human capital understood that entrepreneurship and having clients abroad is the best option, creating a “technological pole of service exporters” that can be the envy of any developed country, such as the company Nextbyn , which Steve Jobs-style started a long time ago. 30 years in a basement and currently has more than 500 collaborators providing logistics software solutions for mass consumption, for all of Latam from the city of Rosario.
This is how Argentina has the largest number of developers per capita in all of Latin America, the vast majority of whom choose to earn in crypto not only because of its ease of sending, but because by allowing anonymity and not yet being regulated, it avoids having to go through by the current tax system.
From Bitwage – the world’s pioneering platform for payment of fees in cryptocurrencies – its VP of Growth, Ramiro Raposo, confirms the data and adds. “We are the only company specialized in payment of fees in cryptocurrencies with 10 years in the market. When we were born, it was a crazy proposal but today we are the solution for thousands of service exporters in Argentina in the technology ecosystem, but in the last year other areas have joined, such as designers, translators, teachers, consultants and even international athletes,” he adds. .
Save on other cryptocurrencies and tokens
Guillermo Escudero, manager of Global Strategic Alliances at CryptoMarket, highlights that we must consider other cryptocurrencies beyond the digital dollar, such as Bitcoin: “If we consider the last 4 years of Bitcoin, we see strong growth given that by December 2019 the price of Bitcoin touched USD 7,000 but despite the situation, the dominant one in the crypto market knew how to overcome several obstacles from unstable markets due to Covid to the fall of the giant FTX. Today Bitcoin is in the USD 35,000 area. A return of 428% that, discounting the accumulated inflation (2019> 2023) of the dollar at 20%, generates a return of 340%,” he clarified.
The second most important cryptocurrency on the market is Ether (from the Ethereum network). Regarding this, he commented that a similar analysis can be done: “The return of the second dominant market gives a 4-year return of 1438%, and discounting the accumulated inflation of that period would give 1180%, which shows that the crypto market In recent periods it was much more attractive than other assets in the market.”
Raposo confirms the data on the collection trend in other cryptocurrencies. “In recent years, the growing level of adoption by people through stablecoins has been notable, thus allowing a new digital way of preserving the value of assets.” And he added. “At Bitwage we observe how in more stable countries than Argentina, more and more users choose to collect their income in Bitcoin as a way of forcing themselves to save and invest part of their fees in this currency.”
Leo Elduayen is CEO and Cofounder of Koibanx, a pioneer company in providing blockchain infrastructure for the financial system of Latin America, from that place, he reflected: “In this sense we see that there are more and more digital wallets and also more interoperability channels where even You can pay for services using crypto or a tokenized asset, and this is what will continue to bring a lot of dynamism to the financial system.”
Tokenization, another emerging phenomenon, adds another layer of diversification to savings. The ability to represent physical assets, such as real estate or works of art, through digital tokens offers opportunities previously unimaginable. This new form of investment not only democratizes access to high-value assets, but also increases liquidity and accessibility.
Álvaro Castro Burgueño, Co-Founder & Chief Portfolio Officer of Rext, was consulted about this option. “In this scenario of great volatility, the tokenization of properties is very attractive for those savers and investors who want to generate more stable returns, and maintain an interesting revaluation potential. If we take into account that Real Estate in the United States was the most profitable investment of the last 20 years, even surpassing the performance of the S&P 500, being able to invest in real estate there from only USD 1,000, without bureaucracies, and receive monthly returns in dollars, it is more than interesting.”
Thus, intelligent diversification is not just about spreading funds across different asset classes, but about adapting to market innovations. Integrating cryptocurrencies and tokenization into the savings and investment strategy not only optimizes diversification, but also positions investors or savers at the forefront of 21st century financial opportunities.