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Argentina’s President supports BTC despite BCRA’s negative outlook

By:
on Aug 13, 2021
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  • President Fernandez said BTC’s ability to hedge against inflation is a significant trait.
  • He believes in being cautious while dealing with crypto, seeing as the space is fairly new.
  • BCRA’s head, Miguel Pesce, claims BTC only generates revenue during short-term hype cycles.

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Alberto Fernandez, the President of Argentina, is bullish on Bitcoin (BTC/USD) and believes there is no reason to fight against the burgeoning asset class. In an interview with a local news outlet yesterday, Fernandez talked about the COVID-19 pandemic, inflation, the environment, and the legalization of marijuana, among other issues.

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The interviewer asked President Fernandez whether he would consider exploring a central bank digital currency (CBDC) or even recognize Bitcoin (BTC) as legal tender. In response, he said he did not want to go too far out on a limb but he sees no reason to say no. Fernandez then mentioned that with BTC, the inflationary effect is largely nullified.

The President added that the Argentine population is increasingly considering BTC an inflation hedge. While he is bullish on BTC, Fernandez pointed out that the crypto industry is still in its early days. Fernandez said it is vital to exercise caution while dealing with crypto because the asset class is largely unfamiliar.

According to him, many people across the globe have similar concerns, explaining why the project or system has not expanded further. Nonetheless, he said it is worth considering crypto adoption.

Argentina’s central bank considers BTC a threat

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While President Hernandez openly shared his positive stance on BTC, Argentina central bank (BCRA) believes digital assets are risky. The authority’s head, Miguel Pesce, spoke during the Argentine Institute of Executive of Finance’s Digital Finance Forum on August 10, saying digital assets are a threat to economic stability. He added that BTC mostly fails to generate revenue for investors, except for short-term hype cycles.

Apart from this, Pesce likened BTC to a commodity, adding that it is not a financial asset per Argentina’s National Securities Commission. To this end, he said he intends to regulate the connection between BTC, the payment system, and the exchange market. According to him, the leading cryptocurrency by capitalization could have adverse effects on Argentina’s financial stability.

Pesce added that the central bank seeks to prevent unsophisticated investors from dabbling in crypto, seeing as the agency believes digital assets are used to generate undue profits on unsuspecting investors. While other countries that bash cryptos are bullish on CBDCs, Pesce said Argentina has no intentions of exploring a CBDC.

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