The interannual Consumer Price Index (CPI), which measures inflation in Argentina, registered record highs of 78.5% last week. In terms of high inflation, this places Argentina second only to Venezuela in Latam, with prices soaring by about 8% in August and hurting Argentineans’ wallets. This has led Argentines to investigate cryptocurrency as a means of maintaining their purchasing power via stablecoins, according to a Bitso survey.
While other commodities, like clothing and appliances, experienced a more significant increase, food and drink costs increased by 7.1% in August. In an environment of political and economic uncertainty, with the country having three different economy ministers in less than three months, the country’s cumulative inflation rate increased to 78.5%, the highest level since 1991. The Argentine peso has lost more than 25% of its value versus the dollar when using the official rate as a benchmark and nearly 50% when using the unofficial “blue” exchange rates. This makes it one of the fiat currencies that has suffered the most in Latin America.
For certain Latam nations whose economies have been impacted by the present economic downturn, inflation is becoming a significant issue. Argentina, one of the region’s largest economies, is currently dealing with rising levels of inflation that are hurting people’s wallets. Prices increased by 7% MoM (month-over-month) according to the most recent CPI report, which is second only to Venezuela’s inflation rate, which has surpassed 100% YoY. (year-over-year).
Crypto Thrives in Emerging Markets
There is a high degree of awareness regarding digital assets in Argentina, according to a recent poll by Bitso, a cryptocurrency exchange with headquarters in Mexico. According to the survey, 83% of respondents are aware of cryptocurrencies, with over 34% having specific understanding of these instruments.
Due to the Argentine economy’s dismal performance, its citizens are looking at alternative means of preserving their purchasing power against inflation and are even considering stablecoins and cryptocurrencies despite the present downward price trend. Despite the fact that Argentina is no longer in the top 10 nations for cryptocurrency adoption, local research show that adoption is still rising.
Additionally, of the 83% of people who are aware of cryptocurrencies, 10% already own or already hold bitcoin assets as part of their investment portfolio, and nearly 23% plan to do so in the future. These investors’ major goals in owning cryptocurrencies are to use them as they would fiat money and to keep their holdings intact despite these inflation rates.
- As cryptocurrency advent rises, Argentine inflation soars to about 80% YoY
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