Milei says there will be ‘currency-free competition’ in Argentina, giving way to Bitcoin

Last Wednesday (19), during a response session to followers on platform X (formerly Twitter), the president of Argentina, Javier Milei, made a statement that echoed throughout the global economy.

In response to a statement posted by a follower, Milei confirmed her position in favor of an open and flexible economy. In addition, she signaled the government’s intention to adopt a policy of free exchange rate competition, allowing the coexistence of several currencies, including cryptocurrencies such as Bitcoin.

Milei’s response was received with enthusiasm by his followers, who see the adoption of multiple currencies as a way to make the Argentine economy more flexible and dynamic. The idea is that companies and individuals can choose the currency that best meets their needs.

The president’s stance, however, has raised some questions among X users. User Franco Amati, for example, raised a crucial question:

“Hello Javier! Note this, we cannot use Bitcoin as currency if regulations ask us to calculate capital gains on every transaction.”

Amati highlighted a common concern about the tax implications of using cryptocurrencies, which can complicate the calculation of profits and losses for each transaction carried out.

Another user added to the discussion the need to consider other cryptocurrencies and stablecoins in the Argentine regulatory framework: “This is the key, Javier! And the same applies to Ethereum and stablecoins like USDT.”

Javier Milei and the liberal economy

Milei’s statements come at a key moment for cryptocurrencies in the world. While countries with stable economies in the global north implement stricter regulations, Milei’s intentions appear not to follow the trend. With accumulated inflation of 115% since the beginning of his term, monetary policies had few changes in the first six months.

One of Milei’s promises was to put an end to the dollar “stakes” that had been in force since the government of her opponents. Today, Argentina has more than 10 different prices for the currency and several restrictions and taxes on its use in the official market. This reality remains the same, but Milei continues with the promise of opening the market for free trading, as is currently the case with the blue dollar, traded on the parallel market.

Despite this, with the deregulation of some sectors, such as the real estate market, alternative currencies have been increasingly present in the daily lives of brothers. Since December 2023, it is not uncommon to see contracts signed in Bitcoin, stablecoins or dollars (always at the parallel dollar rate).

Furthermore, since 2019 it has also been possible to receive salaries and payments for services provided legally in cryptocurrencies. However, even with its use becoming increasingly common, Argentina does not have any law regulating cryptocurrencies yet.

Future of cryptocurrencies in Argentina

The implementation of a free exchange rate competition policy will not be without challenges. The main concern is the volatility of cryptocurrencies. The value of Bitcoin, for example, can vary drastically over short periods of time, which can make it difficult to use as a stable exchange currency.

Additionally, there are regulatory issues to be resolved. As highlighted by Milei’s followers, the taxation of cryptocurrency transactions is a problem, as the country still has high taxes. Without a clear structure, companies and individuals may face difficulties in joining a multi-currency system.

Another important point is the infrastructure necessary to support the widespread use of cryptocurrencies. This includes not only technology for secure transactions, but also understanding and acceptance by the general public.

According to Julián Colombo, CEO of Bitso, today 9 out of 10 Argentines have never operated with cryptocurrencies. In this sense, financial education will be crucial to ensure that all Argentines can navigate with confidence in a market where several currencies coexist.

If implemented successfully, free currency competition could transform Argentina into a global leader in the adoption of emerging financial technologies. However, the path to this transformation will be complex and will require a careful balance between innovation and regulation.