Incoming Argentine President Javier Milei once again demonstrated his determination to shut down the Central Bank of Argentina (BCRA) on the X platform, stating that it is a non-negotiable matter. He also mentioned ongoing discussions with the International Monetary Fund (IMF) regarding Argentina’s fiscal adjustment plan and monetary policy in search of solutions to address the country’s economic woes.

The self-proclaimed “Bitcoin fanatic president” Javier Milei, who promised to close the central bank, officially took office on December 10th. Upon assuming power, Milei swiftly implemented radical economic policies to tackle the fiscal deficit and control the country’s soaring annual inflation rate, which was nearing 150%. These policies included devaluing the national currency, the peso, by more than half, and announcing a series of austerity measures to reduce government spending, which garnered approval from the International Monetary Fund (IMF).

In a crypto-friendly move, the Milei government unveiled its first cryptocurrency policy today (22nd). Diana Modino, the newly appointed Minister of Foreign Affairs and International Trade of Argentina, announced on the X platform that Argentina has approved and recognized Bitcoin and other cryptocurrencies as valid currencies for transactions in commercial contracts.

Argentina Could Become a “Bitcoin Paradise”

According to Cointelegraph, the newly elected Argentine government passed the “Foundation for Argentine Economic Reconstruction” decree on December 20th. Although it does not explicitly mention cryptocurrencies, it includes provisions that allow debtors to choose currencies or items other than the Argentine peso for payment, granting individuals the freedom to choose the type of currency they prefer.

It is worth noting that Mondino is one of the most outspoken Bitcoin supporters in the Argentine cabinet. According to DL News, in August, Mondino stated, “Argentina can become a Bitcoin paradise.” In November, she announced at a Bitcoin conference that the Argentine government supports currency freedom and will allow contracts to be signed using Bitcoin.

Bitcoin to Rescue People Suffering from Severe Inflation

With the official approval of using Bitcoin in contracts, it is speculated that Argentina is taking the first step towards broader adoption of cryptocurrencies.

Argentina has been plagued by severe inflation for many years. The country’s CPI report from November revealed an accumulated inflation rate of 148.2% for the year, with a monthly increase of 12.8%, causing significant hardship for the Argentine people. As a result, many have turned to using cryptocurrencies such as Bitcoin and the US dollar.

According to a report released by Chainalysis in October, Argentina ranks 15th globally in cryptocurrency adoption, and its cryptocurrency trading volume far surpasses other Latin American countries. Estimates indicate that the country’s trading volume reached $85.4 billion during the 12-month period ending on July 1st.

Will Argentina Become the Next El Salvador?

During his campaign, Javier Milei, often referred to as the “Trump of Argentina,” vowed to take extreme measures to save the economy, including abandoning the peso and adopting the US dollar as the official currency. After his election, he mentioned ongoing discussions with the International Monetary Fund (IMF) about Argentina’s fiscal adjustment plan and monetary policy.

The crypto community is speculating whether Argentina has the potential to become the next El Salvador by legislating Bitcoin as its official currency. However, Milei has not publicly addressed his support for Bitcoin or other cryptocurrencies, nor has he expressed willingness to legalize them as official currencies. It is worth noting that the loan agreement between Argentina and the IMF contains provisions that restrict the use of cryptocurrencies, which may be one of the reasons why the Milei government has not vigorously pursued policies supporting cryptocurrencies.