Stablecoins are being used by Argentineans to protect their savings against recent uncertainty brought on by the resignation of a number of important government officials. Along with other notables, the country’s minister of economy resigned over the weekend, causing unrest that led to an increase of 11% in the price of stablecoins on some exchanges.
Due to the current political and economic unrest in the nation, the rate at which Argentineans exchange their native fiat currency, the peso, for dollars has drastically decreased. Martin Guzman, the country’s economy minister, abruptly resigned, shocking many because he was a key figure in the agreement the nation reached with the International Monetary Fund (IMF) to restructure its debt to the body.
Other significant ministry officials, such as Ramiro Tosi, Roberto Arias, and Rodrigo Ruete, also resigned in response to Guzman’s resignation. Due to this, the peso to dollar exchange rate on various cryptocurrency exchanges reached record highs. According to Bloomberg, the rate reached 257 Argentine pesos on the Binance exchange, a rise of 6.6%. On the Lemon Cash exchange, prices jumped 11% to 279 pesos.
The situation has caused Argentinians to rush to exchange their pesos for foreign currencies like the U.S. dollar and also for dollar-pegged stablecoins like USDT. Even with the appointment of a new economy minister, Silvina Batakis, the market did not recover to its previous rates. According to local media, the exchange rate fell even lower to 280 pesos per dollar, even reaching the 300 pesos per dollar mark on some exchanges.
Furthermore, the volumes of stablecoins traded increased significantly. Some operators reported increases of 500% in volumes traded during some hours of the weekend, with most traders trying to anticipate the rise in traditional markets to take advantage of the arbitrage opportunities.
The exchange rate of the digital dollar went over the exchange rate of the physical dollar, showing that Argentinians prefer to purchase these variants due to the simplicity of trading them again for other goods and also for the different uses they afford compared to dollar bills. The movements are consistent with a survey conducted by Americas Markets Intelligence in April, which found that 12% of the population have invested in crypto, and 18% were interested in investing in crypto.
