Argentina's Milei Devalues Peso By 50 Percent

Milei is an advocate of hard money, but Argentina may not be ready for Bitcoin.

Will Milei be successful where so many others have failed?

Argentina's controversial new president, Javier Milei, has devalued the nation's currency by more than half and taken his signature chainsaw to public spending as he makes good on his promises to curb rampant inflation.

USD/PESO chart (TradingView)
The Peso is trading around 800 to the dollar, from below 400.

As his first move as President of Argentina, Milei signed an executive order that cut 12 of the Argentine government's Departments, leaving just nine.

Milei's actions underscore his contempt for corrupt and bloated bureaucracies, including the central bank, which he views as a scam. His decisive moves (though not his views on central banks) have also been praised by the IMF.

Bitcoin-Friendly Policies?

Milei is often described as a Bitcoin-friendly politician, with Argentina being the ideal candidate for adoption. The country has struggled with runaway inflation for years, and the measures enacted so far have not brought it under control. Inflation recently topped around 140%.

Milei's foul-mouthed tirades became a regular fixture in his presidential campaign, as he criticized the corruption and incompetence that had led to his country's decline. Fiat money entails an unjust tax, he says, with the central bank being the worst culprit in defrauding citizens. Money is an invention of the private sector, and that is where it needs to be returned: Something that Bitcoin achieves.

However, support from the IMF does not sit well with this idea. When the country borrowed $45 billion from the IMF in March last year, one of the conditions was that it would take steps to discourage the use of cryptocurrencies. Stablecoin use has soared as Argentinians seek to protect the value of their savings. The country has one of the highest rates of crypto adoption in the region, with more than 50% of people having used stablecoins to make a purchase.

As a result, it seems unlikely that Argentina will go the same way as El Salvador and make Bitcoin legal tender. A more likely scenario is that, as Milei promised in his campaign, the country's economy will dollarize–effectively handing control of the currency from the Argentinian central bank to the Federal Reserve.


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