This week Alberto Fernandez, President of Argentina, suggested he was open to adopting Bitcoin as legal tender to fight inflation. The comments were made during a local television interview aired by Filo News.
During the interview Fernandez was amenable to the idea of Bitcoin becoming legal tender and taking on a larger role in Argentina’s economy.
When asked whether Argentina would follow the path of El Salvador in terms of Bitcoin adoption, the president said, "I don't want to go too far out on a limb [...] but there is no reason to say no."
It is important to note that while Argentina and El Salvador both suffer from inflation, the U.S. dollar is not legal tender in Argentina, and they have tight currency exchange controls, which create a black market for foreign and digital currencies.
Argentina is currently seventh in the world inflation index with an inflation rate of 51.8 percent, according to Trading Economics. In correlation with this statistic, in 2020 Bloomberg listed Argentina as the second most miserable economy in the world. The country’s need for a hard store of value such as Bitcoin is readily apparent.
"They say the advantage is that the inflationary effect is largely nullified," President Fernandez explained.
The president’s comments were made with a healthy skepticism. "It is a global debate, and I must confess that it is a topic that I approach with caution. In my case, there is caution because of how unfamiliar it is, and because it is hard to understand how this fortune materializes," he said, referring to Bitcoin’s rising price.
The president’s comments were markedly more open to the idea of Bitcoin adoption than those made earlier this week by the president of Argentina’s central bank, Miguel Pesce, who a local news outlet reported as saying, Bitcoin “is not a real financial asset, and does not generate any lasting profitability.”
Fernandez explained, "Many people in the world have these concerns, and that is why the project, or the system, has not yet expanded. But it is something to consider."
“Perhaps it is a good path to take," the president said.