Javier Milei’s election as Argentina’s new president on Sunday has sparked intense debate about the potential adoption of Bitcoin as legal tender in the Latin American country.
Having spoken frequently and positively about the crypto asset in the past, and having called for the abolishment of the Central Bank of Argentina, the price of Bitcoin rose to around $37,500 as Milei’s opponent, Sergio Massa, conceded election defeat.
Milei has not set any specific policies regarding Bitcoin, but the dollarization of Argentina was a core tenet of his presidential campaign.
Should his country adopt BTC as legal tender it would be the second country to do so after El Salvador which did so in September 2021.
Now, it has been reported that Max Keiser, El Salvador’s main crypto adviser to President Nayib Bukele, is planning to go to Buenos Aires to meet the new administration.
While it remains uncertain whether Milei will officially adopt Bitcoin as legal tender in Argentina, his presidency and his ultra libertarian ideologies suggest a more favourable environment for it to happen.
Furthermore, I’m confident that within the next five years, it is almost inevitable that Latin American countries will adopt Bitcoin as legal tender, following in El Salvador’s footsteps.
The combination of economic, technological, and social factors can be expected to contribute to this change.
Latin American countries have a history of economic instability and high inflation rates. Bitcoin, with its fixed supply and decentralised nature, serves as a hedge against inflation. Citizens and businesses alike are, unsurprisingly, increasingly drawn to the prospect of a stable and non-inflationary currency.
A substantial portion of the population also lacks access to traditional banking services. Bitcoin provides an opportunity for financial inclusion, allowing individuals without access to traditional banking systems to participate in the global economy.
Plus, Latin America is a significant recipient of remittances, and the current remittance systems are often slow and expensive; whereas Bitcoin’s borderless and instantaneous nature makes it an attractive alternative for cross-border transactions, reducing costs and increasing the efficiency of remittance processes.
The underlying technology of Bitcoin, blockchain, offers transparency, security, and immutability. Latin American countries can leverage blockchain for various applications, such as transparent government transactions, reducing corruption, and enhancing overall economic efficiency.
The region has witnessed a surge in mobile phone adoption, even in remote areas. With Bitcoin transactions primarily occurring through mobile applications, the widespread availability of smartphones facilitates the integration of Bitcoin into the daily lives of people living there.
The continent also boasts a young demographic, and younger generations tend to be more receptive to technological innovations. Younger people’s familiarity with digital technologies positions them as early adopters of crypto, potentially influencing broader societal acceptance.
In addition, media reports show grassroots movements and community-led initiatives promoting the use of Bitcoin have gained traction in various countries in the region. These efforts, coupled with growing awareness, contribute to the normalisation of crypto as a legitimate and accepted form of payment.
Historical instances of economic crises and financial mismanagement have eroded trust in traditional financial systems. Bitcoin, as a decentralised currency, offers an alternative that is not subject to the whims of central authorities, attracting those who seek financial autonomy.
To be clear, there’s no timeline or guarantee, but I’m confident that it’s almost an inevitability that some Latin American countries will move to adopt Bitcoin as legal tender in the next five to 10 years due to a confluence of economic, technological, and social factors. And it could be seen that Javier Milei’s presidency could potentially serve as a catalyst.
Nigel Green, deVere Group CEO and founder