From Free Think:
ARS has a pegged exchange rate, meaning its value is not set by market demand like USD but rather is set by government mandate — and the pegged exchange rate almost always overstates the value of the peso. As a result, there is a thriving black market ... If you bring $1 USD to a legal exchange, you get just 110 ARS pesos, whereas you’ll get 215 ARS pesos in return for that same dollar at a cueva ["cave" or illegal "black market"].
And the government keeps printing money, which devalues the currency, and eats into savings:
If you’d saved $100,000 USD worth of pesos in 1995, they would be worth about $310 USD today. In the mid 1990s, 1 ARS = $1 USD; as of July 2022, the value is 322 ARS = $1 USD. Anyone who held onto pesos in that time would have had their life savings obliterated.
Argentinians have learned that it’s much better to save in other countries’ currencies, and the favorite for decades has been USD, particularly in the form of $100 bills.
As a result, Argentinians are using Crypto (mostly stable coins), rather than ARS, to move money around, mostly in illegal "black markets."
BOTTOM LINE: Crypto will make it harder for a country with its own currency to profit by printing money (no one will accept it) and make it easier to evade taxes (because governments cannot track transactions in cryptocurrency.
HT: MarginalRevolution.com
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