Topic: [2019-09-02] Argentina capital controls, a strong case for bitcoin (Read 553 times)

In case another recession occurs at some point of time in the future, then I believe that Bitcoin will gain a lot of popularity and acceptability. Many of the countries are collapsing from the public debt, as the debt vs GDP ratio has gone much above the permissible levels. Complete meltdowns have occurred in countries such as Greece and Cyprus, and many more countries are likely to follow. Some of the fiat currencies are going to become worthless.

Hello guys,

I am from Argentina. I would like to tell you that Bitcoin is quite popular in my country and I think the fundamental reason is that Argentines do not trust our currency and our governments. Of course, the main choice will always be the US dollar but many people, especially young people, are choosing cryptocurrencies to try to diversify their portfolio.
Our history has taught us not to rely too much on the rules imposed by the governments. Therefore, I would say that there is no country where you can take advantage of the benefits of cryptocurrencies better than Argentina.

I want to take the opportunity to share the link to my website where I will upload the 10 most important news of the day regarding the world of cryptocurrencies. I hope you find it useful, please keep in mind that it is still a draft version.

https://mervalnews.wixsite.com/crypto

Thanks and regards!
Alberto

OK... In case $15,000 is needed for the emergency expenses, then the user needs to sell 10 oz. of gold (as per the current prices). But there is no requirement of doing this conversion in one go. He can go to 10 different pawn shops, and sell 1 oz each. In Latin American countries, there is no scarcity of pawn shops and you can find them in any nook and corner.

If you use Bitcoin instead, then it won't attract any attention from the authorities. You can do peer-to-peer transaction and receive the amount in physical cash (banknotes). But in case the user lives in some second tier city with very few Bitcoin users, do you think that it will be easy for him to find a buyer who is willing to purchase such large amounts of coins?

Doable? Yes. Safe? Not at all.

Corruption is widespread in Argentina. The police regularly take bribes from criminals, let them operate in safe zones that they don't police, or even work with criminal rings. The government is hardly any better. If someone discovers you are storing $10,000 worth of gold in your house, that becomes a big problem.

Sure, but he was talking about trading large amounts without drawing attention himself. Trading a necklace or a ring is one thing. Walking in to a pawn shop with 10 ounces in pure gold is going to attract more attention than sending one bitcoin from your wallet to another.

I'm not sure if you own Gold coins or Gold bars, but they are quite small and do allow you to store a lot of value in them. In that regard, it's not a problem at all for someone to store $10,000 worth of Gold at home. For most people in Argentina that's quite easy and convenient, especially with how they don't trust banks anymore.

You can walk into a jewerly store and have it converted to fiat, while with Bitcoin you don't have that level of acceptance there. Gold jewelry is commonly accepted as a valuable good that can be exchanged to fiat at any time, which makes it even easier for people to liquidate pure Gold coins/bars. It's really not that difficult or risky as you make it appear to be.

How will this be easier?

In both scenarios, he is trading something for cash. To trade gold without the attention of the authorities, he must be storing the gold himself in his house and trading one-on-one with another person? That's incredibly risky. Or is it being stored by a bank or other institution? That's even riskier since the government can confiscate it whenever they want, and any trades done via said institution will be visible by the authorities.

With BTC, it's as simple as sending coins from one wallet to the other and handing over the cash. Quick and easy, and also invisible to the authorities. Also, as pesos become more worthless, and foreign currency becomes ever more difficult to obtain, bitcoin will become accepted as a method of payment by more and more vendors and retailers. Trading it for fiat will become less necessary as time goes on.

I agree with what you posted. But do you think that in case there is an emergency, it will be easier to convert Bitcoin back to fiat currency? They have all these capital controls and converting fiat to BTC and vice versa is going to be extremely difficult. Suppose a particular individual had opted for BTC instead of USD. It will make him immune to confiscation by the authorities. But let's say he suddenly faces a cash requirement, in the form of medical expenses or similar issues. The hospital authorities are not going to accept BTC, and they'll accept only the Peso or USD. And it may not be easy to convert large amount of BTC to fiat without attracting the attention of the authorities. If he had gold instead of BTC, then it will still be easier.

I was implying more about the people choosing the candidate with an opposite image. Look at America since the 1990s. There was Bush then Clinton, Clinton then George W, George W then Obama, Obama then Trump hehehe.

However yes, they are all the same corrupt gang of thieves, only with different agendas.

No, and the government just made it harder. They are trying to force people to use the peso rather than instantly offload it to some other currency, which helps to drive it's rampant inflation. If no one wants a currency, if no one believes it has any value, then it becomes worthless. This is pretty much exactly what happened in Zimbabwe. The populace lost faith in the government and in their currency. The government banned all foreign currencies and tried to force people to use their currency. This didn't stop people buying other currencies, just created a black market and made the government currency even less valuable than it already was.

The situation with the peso will not improve while the current Argentinian government continue down this path. Inflation will continue, and the rate of inflation is likely to increase. Holding peso only guarantees a massively loss of purchasing power. Bitcoin is rapidly becoming the most obvious (and easiest to access) alternative.

define "stable"


in these circumstances, paper dollars are the only option if dollars is what you want. and paper is easy to confiscate, and not so easy to hide.

hence the reason for this story. Bitcoin is, in practical terms, more valuable than the dollar in Argentina.


There's nothing stable about having $10,000 as pieces of paper on Friday, then only having an empty space where the pieces of paper were previously sitting on Saturday morning.

The point to be noted here is "as little of my net worth in pesos as possible". Is it that easy to convert your wealth to some stable asset such as gold or United States Dollar in Argentina? From what I have heard, it is not. And that's why they have capital controls. The situation is not as bad as Venezuela, but they are definitely moving in that direction.

It may be the political class' fault but if the history of Argentina tells us anything, the people won't choose the opposite, they will choose more of the same:  voting for the people who promote envy and promise "free" stuff.

@cr1776. It will then be their political class' fault if they lose the trust of the people. In the next election or the next change in regime, the people will choose the opposite of the incumbent. I have read about a country electing a murderer for a president. I reckon the president before him must be learned, belonging to a political class but very corrupt and who failed his people.

Argentina won't. Their power-hungry political class won't let them.  They have demonstrated that for many, many decades.  Likewise, many citizens won't let them because they want "free" something so they'll continue to vote for socialism, fascism etc because they are greedy and want someone else to pay for their own choices and the consequences of those choices.

Individual citizens of Argentina might do so though, through self interest and individual choice.  That probably won't save Argentina, but it will save those people who are smart enough to make intelligent choices.

Nothing will save Argentina, Venezuela or anywhere else in the world as long as people think they have the right to vote themselves money that someone else earned.

Fact is that the depreciating currencies will save themselves eventually by imploding. It's only a matter of time before this happens, but then we get another shitty government currency people are forced to use.

At the end of the day, we don't have to be dragged down by fiat to the fullest and painful extent. If people by now haven't allocated a portion of their net worth to Bitcoin or other assets they're just begging to lose 99% of their purchasing power.

Also, Bitcoin doesn't need to be saved. It has shown growth in terms of price and hashrate consistently throughout the years, and that while people thought this concept was doomed to fail. That's extremely bullish.

^^^

I can't figure out whether to give o_l_e_o a merit or 2 for the above post


on one hand, the points made are solid arguments

on the other, why encourage arguments with such ignorants?


if Harlot thinks saving steadily depreciating currencies is better than saving volatile appreciating currencies, who are we to argue? if Harlot actually believes that, then we'll get we deserve, and so will Harlot

They are risking the money they have left if they do nothing. Their currency is devaluing constantly. It is currently around 60 pesos to the dollar. A month ago it was 45 pesos to the dollar. A couple of years ago it was 10 pesos to the dollar. If I were Argentinian, I'd be holding as little of my net worth in pesos as possible.

Two problems with this. How many average Argentinians do you think have an easy on-ramp in to the stock market, and how many people have enough money to buy on the stock market? These are people living in poverty. They are looking to stop their money devaluing so they can use it to buy food, water, pay bills, etc. The government have just made it harder for people to trade pesos for dollars, which is historically what they did to protect themselves against rampant inflation.. The stock market isn't a viable alternative and can't be spent on day to day needs. Bitcoin can.

Agreed. However, John F Kennedy had a more lasting legacy in America and passed on that legacy to the bitcoin community. He invented the phrase we are going to the moon hehehe.

A volatile currency won't be the solution here for their country. They will just be risking the money they have left if they tried to enter the market. If they can't even manage the stable fiat currencies they have what made you think that they can also handle a asset that changes price to quickly? On a investors point of view then definitely each citizen must put it into consideration that Bitcoin might be a safe haven for them but are they even ready to enter the market yet? I would rather encourage them to hold of the money they have and play it safe on falling stock prices in their stock market just to be safe, buying some bluechip companies is also a good alternative for them.

The main problem I see is the deep rooted social(ist) system that started with Peron. There are millions of people living/surviving on welfare, a state that has all the natural resources in the world but doesn't invest in modernising its infrastructure to be able to exploit them properly and a small percentage of people who have to pay the huge bill (the middle class).

And then of course you have the trade unions, a real mafia that dictates who will work where, and with which salary and won't hesitate to paralyse the country if the government tries to take away an inch of their power. They have made the once prosperous Argentinian industry completely irrelevant after all these years of meddling.

Any party (right or left wing) that tries to cut the ruinous welfare system can say goodbye to ever being elected or reelected, and as we all know the main interest of politicians is not the well-being of the country but their reelection.

Perhaps not to that extent, but most people with some sense in their head have converted a portion of their net worth to Bitcoin or even Gold. It's not that hyper inflation is something that we just got to witness; it has existed for many decades, which should have made people more interested in alternative forms of money.

For some reason people tend to wait and hope for the government to introduce changes that will help improve the economy, but these in most African countries have never really yielded anything. People's 'next time things will be different' mentality works against them. Things haven't been different for the better, only different for the worse. Peolpe need to wake up and help themselves.

I read a news a few days ago that said that even if Mauricio Macri or Alberto Fernández win, by 2020 Argentina will still be in economic crisis. The biggest problem for Argentina and many countries is the lack of a good alternative to govern the country. Political parties that are years in power, the same people who are years in power cannot bring in new energy, cannot bring in a new healthy system.

What happens is this: A guy X that have 60-year-old and his 30-year-old political party that govern the country win the election. The guy X that have 60-year-old governs the country for 10 years and can't change anything in the country, after 10 years the guy loses elections or another guy from his political party starts running the country.

people will look again the guy X that have 60-year-old (now 75) wanting to govern the country again. Let's face it, what kind of changes can there be? nothing is going to change

Thank you for your explanation. It makes sense now. If they can't even maintain a peg to the US dollar, that just tells you how problematic the situation in that country is. What a joke. Who's ever going to trust that government again?

The premium you pay to buy Bitcoin in order to finally be free from that horrible currency, is a small price to pay for long term price appreciation and financial freedom. It's an opportunity of a lifetime for them. Literally.

We can't fathom how much stress these people go through to find out that their fiat buys them less groceries today than it did yesterday, and that for years straight. Much respect to these innocent people who fell victim to their mafia government.

They weren't printing USD. What they were printing were what they called bond coins and bond notes, which were officially pegged 1-to-1 with USD, but in reality traded for far less than this. These bond notes later went on to become part of their new currency which was launched earlier this year when the government declared all foreign currencies are no longer legal tender.

These bond notes were initially pegged at 1-to-1, but actually traded around 3 or 4-to-1. Since becoming part of Zimbabwe's new official currency, they are supposed to trade at 2.5-to-1 with USD, but currently go for around 11-to-1, and continue to rapidly devalue.

Another great use case for bitcoin, but you'll pay a premium trying to buy it in Zimbabwe. Still, within a month or two you would have lost far more value from holding a rapidly devaluing fiat.

Zimbabwe printing US dollars? That's probably one of the biggest crimes there is from the perspective of a government. I don't think that's what happened, otherwise it would big big news covered worldwide.

It might be that some crime syndicates there have printed fake US dollars and that it came into circulation, but the central bank of Zimbabwe doing that is highly unlikely in my opinion.

Last year I saw news coverage that some local governments in Zimbabwe have created their own currency, only usable within their state. This is quite an ingenious way to stop losing purchasing power.

People traded their near worthless Zimbabwean dollars for these non official state currencies, which looking back now, was a fantastic move. It's a big f-you to the main leaders of Zimbabwe.

The implication is then that as more countries devolve in to monetary chaos, bitcoin usage doesn't just become advantageous but pretty much necessary. It begins with countries like Zimbabwe and Argentina which have rapidly devaluing currencies, but all fiat currencies are, by nature, devaluing. "Strong" currencies such as USD, EUR, GBP and so forth are still facing a horrendous few years: impending recession, out of control and ever growing debts and deficits, increasing inflation, chronically low interest rates, trade wars and new tariffs, etc.

People are feeling squeezed. The same paycheck doesn't go as far anymore. Rents going up. Food prices going up. Insurance going up. Fiat value going down. Bitcoin looks ever more attractive.

And that's why they killed him, you would probably do the same, the killing culture is very developed in USA.

The mere fact that he was one of the most popular president in recent American history probably doesn't mean anything to you, but if you are American you must be proud with George W. Bush or Trump.

in other words, places like Argentina are where the real Bitcoin culture is actually taking place, people in that country actually need it. Out of >300,000 tx/day, a significant proportion are happening in places with strict capital controls and/or monetary chaos, out of actual necessity (so also Venezuela, Turkey, China, Brazil...)

These are the real marketplaces for the cryptocurrency space. Only idealists are interested in places with (relatively) stable local fiat, in Argentina, BTC is realism

There was nothing in my post that implies that Argentina should look for more loans. Did I not already say that loans from the World Bank, the IMF or China and America are troublesome for 3rd world countries?

Any Argentinian who has half a brain and considerable savings has done that already. You wouldn't believe how well they can play the system, decades of disastrous governments have kind of made them this way.

Back in 2014 I spent most of the year in Buenos Aires and at that time there was an "official" exchange rate for the Peso and a real one (that was between 50% and 100% above the official rate). You could buy Pesos at the official rate, but not foreign currency, so people had to resort to the black market to get dollars or euros. The center of the city was full of small clandestine offices exchanging currency, along with many dodgy-looking street exchangers. In all these places you could always find a queue of people waiting to get rid of their Pesos before the next devaluation.

The most creative ones would find ways to buy USD at better rates with different methods, for example using their credit cards in casinos in Uruguay to buy chips (at official exchange rate) and then cashing them out into USD.

As bank transfers to other countries were also blocked, there were offices that did so-called "giros". You could take your currency (local or foreign), give it to a person and they would make sure that it would appear in a bank account anywhere in the world, for a small fee.

The most tech-savvy people however already knew about BTC and took good advantage of it. There was a company called Satishitango (it still exists and actually it got really big and legal now) that would purchase your BTC at Bitstamp-2% and blue (good) exchange rate and send a guy on a moped to your flat with the cash in hand. It literally solved my problems to transfer money into the country as my first and last attempt of sending a wire got my money lost forever.

Back in those days there was already a quite big Bitcoin club in Argentina, and some good startups emerged from that scene such as Ripio, Flixxo or RSK. Mauricio Macri spoke out as a big supporter of Bitcoin, not sure though if it will still fit well with his latest plans.

Today I know that there are still plenty of offices that use BTC to send money in and out of the country, and I bet they will multiply like mushrooms in the short future.

Fair enough. Lol.

The ones who are full on board (e.g. Bernie, Warren, AOC, et al) are the ones who couldn't make it in the real economy so need to use force to impose their ideas on everyone else. Socialism-ideas so good they have to be imposed by force. (Applies to any form of authoritarianism - fascism, communism etc).

well, let's be fair:

they're mostly drugged up, all stooges, and all more than half way there to socialism

Agreed. Everyone should be doing it, just some people have a little more urgency.

Kakmakr
Yeah, it's what I call the colonization. It starts economically and ends politically

The debt country perhaps not, but it can help the citizens there to protect their wealth, that's what the OP wanted to show. Even knowing the crypto market is volatile they have maybe more chance to save it than their national currency, loosing already 25% (?). It could be another traditional currency, not necessary BTC

Remember about the Zimbabwean currency? The currency had been devalued to such an extent that the country was printing Zimbabwean $100 trillion bills lol. After they stopped to use the currency for another. They used multiple currencies at the same time in the end, they were also printing USD bills (if I remember correctly)

One wonders why more Americans/Germans/Brits/insert Western country here don't do the same. Everyone the world over is being fed the same lies - "this time it's different", "we're all in this together", "working for you", "make us great again", blah blah blah. And every time the politicians get more corrupt, the banks consolidate more control, the rich get richer, and the average people suffer. The economy tanks and the banks and billionaires use it as an opportunity to buy up more assets cheaply, while large portions of society struggle to keep up with their bills or feed their children. Who cares about the poor dying though, right? Think about the profits!

At least back then they went to the effort of making it look like it was a Soviet defector who did it. Now they can just openly murder people like Epstein in his cell and nobody can touch them.

Argentina is a great case to see how bitcoin is going to reach / help or not, countries that face economic problems.
I believe that due to the capital controls, the Argentinians will try to find new ways of funding their economic activities or strengthen their purchasing power. This can be achieved easily with Bitcoin... My question now is: Is the Argentinian government Bitcoin friendly or not?

JFK?   You can't be serious he was a drugged-up stooge on the path to socialism. 

it's not a coincidence

Some people in the UK media have been promoting Boris Johnson as a political personality for over 15 years. Ask yourself: what for?

he's a total buffoon. he has almost nothing to offer, and yet he became the ostensible most powerful figure in UK politics. There are hundreds of representatives in the British parliament, and the editorial wing of the UK media chose to devote untold amounts of pages/minutes to someone with no redeeming features or skills, as if those qualities are in and of themselves newsworthy? "WORST POLITICIAN YET" was the perennial gist of every Boris story, ever

and these people supposedly have even the slightest sense of responsibility for starting that downward spiral?

the apparent fact is that people like Boris Johnson can become well-known for being bad at doing everything, then become Prime Minister. If just getting alot of TV time can do that, there's something seriously wrong with this garbage culture, as it's this sort of supposedly mindless behaviour by the media that has caused the rise of the "incompetent leader" all over the world, not just the UK. And the media did this worldwide, in synchrony? While international relations are breaking down for unrelated reasons?



John Kennedy was as bad as the rest of them, plenty of skeletons in that cupboard. He made the mistake of trying to upset the rest of the established power structure, and someone was sufficiently pissed to have him murdered. The whole hero worship thing was just what you do when head of state is killed, all the more so when some people in the media knew they had to help cover up the circumstances of the shooting. Making out JFK as an angel sent from heaven strengthened the effect of the "have some respect for the dead" argument when people speculated about inconsistencies in the official narrative.

Politicians are just pawns in the hands of the powerful who use them to control people and pass laws to control them. This is particularly pronounced today, it is enough to look at who leads the most powerful countries in the world, these are certainly not people who have the honor, morals or feelings for the people. There have been good politicians in the past (JFK), but they don’t last long in a world like this.

I do not see how people in Argentina can just like that switch to BTC, capital control means that they can exchange their domestic currency in limited amount every month for $, but this restriction is quite sufficient for ordinary citizens. People still choose to buy fiat ($), rather than BTC, and I do not believe that will change so easily.

I think the countries themselves already know this. Give in to aid packages and you basically sign away some form of our country to the devil. Mahathir knew this in the late 1990s when the World Bank offered to bail Malaysia out of the great Asian crisis. His refusal was slammed by most of the West as callous, but then later that particular brand of Mahathirism was lauded for preventing the country from getting into an inescapable pact with the banking powers.

But it's difficult to break out from the cycle. People want to remain in power for as long as possible. Aid packages that delay the inevitable long enough for you to retire before everything crumbles, so you can handover the doom to your successor? That's just irresistible.

It’s horrible advice. The Argentine government should consider finding real solutions to the problem by encouraging production rather than looking for more loans.
The dependence of the national economy or reserve on a highly volatile currency makes the adoption of economic policies really unknown.
Even individuals who invest in BTC should not put all their capital in this currency. "Don't invest more than you can lose."

I agree with you that relying on the US dollar as a single reserve is not right

There may be no alternatives, or those offering an alternative might be so off the wall they're not even worth considering.

That's how Bolsonaro got in. Everyone before was so shit I guess the electorate decided he was worth a try even if he came round and personally raped you.

It seems to be repeating everywhere now. In the UK we either have a bunch of right wing pricks who are clueless, or we have a bunch of commies stuck in the 70s who are even more clueless.

I don't understand where the competent people have gone. These days it's either psychopaths or the fractious and ineffective.

Argentina has been mismanaged for decades, they keep selling bonds and then defaulting. And yet the people of Argentina keep electing the same old statist/progressive/fascist/socialists and wondering why the results aren't different.

One wonders why more Argentines don't take money off shore or use bitcoin, because although the politicians keep saying "this time is different", it really isn't. 

When the people vote for something for nothing and envy (envy isn't one of the seven deadly sins for no reason) they will keep getting nothing for something and always be much worse off than if they voted for freedom.

It is a well known fact that the loans that are being granted to these third world countries, comes with a lot of strings attached and that the country giving the loans, gets their teeth into their prey, when they do this. They get the power to influence the economic policies of these countries to favor them.

They also add interest and levies to these loans to make it harder for these countries to pay back the loans and this helps them to have control over those countries. < https://www.imf.org >

Bitcoin cannot help these countries to get rid of the debt, but if they invest a small portion of their capital in Bitcoin and the price goes up, then they might take those profits to pay back some of the loans. 

I reckon that there might be a stronger case for the Argentinian government to hold bitcoin in their reserves if they want to remove themselves of state intervention.

Some of you might not know this but if a powerful country like America or China loans US dollars to a 3rd world country, it is not because those powerful countries want to help. The 3rd world country borrowing the money has given America or China some control in its economy or policy making in exchange.

The IMF and the World Bank are also 2 institutions that make these kind of deals.



The government of Argentina has imposed capital controls on its citizens in a response to growing financial issues for the country. The South American country has limited dollar purchases to only $10k per month after $3 billion was drained out of their foreign currency reserves on Thursday and Friday alone. Is it time to switch to Bitcoin?

Argentina’s national currency, the peso, has been in free fall the past few weeks as the government attempts to pay off their short term debts. The peso is down over 25% in the last month alone. Interest rates spiked heavily as the Argentinian central bank tried to control their debt, making the decision Wednesday to delay payments on the $7 billion of debt this year.

The decision comes from President Mauricio, who ran on the promise to get rid of state intervention in the economy. He is now doubling back on his ideals by imposing currency controls. The current political landscape in Argentina is suggesting Mauricio and his party will lose power in the upcoming October election. This fact is scaring many investors in the country.

The opposition has been calling for currency controls, claiming that the government was in a “virtual default.” The reserves of the central bank fell nearly $12 billion due to political uncertainty

Read in full https://bitcoinist.com/argentina-imposes-capital-controls-strong-case-for-bitcoin-adoption/