Local Government in Argentina Is Looking to Issuing Own Cryptocurrency
Argentina is taking the route of cryptocurrencies as the government officials talk about issuing digital currencies to get funding. This week, the province proposed to create an Argentine Digital Currency for one of the Norte Grande districts to support the national and provincial government.
The officials are also seeking to convert mining royalties into tokens to create a stablecoin backed by lithium, gold, and silver. However, it is not limited to precious metals but can also include industrial parks, solar energy, etc. — “A lot of things can be tokenized.” The official told local radio,
“We believe that this can be attractive to investors and a way to channel savings and finance production.”
The digital peso is also expected to protect the country from inflation.
According to a local publication, before the coronavirus pandemic took over, the Ministry of the Interior, which manages issues pertaining to domestic politics, called a meeting with cryptocurrency experts to get an understanding of their issuance and if provinces and municipalities could use them to finance themselves. Trader and economist Alex Kruger noted,
“The idea of issuing crypto is catching on at the local governments' level. Many local governments (local = provinces, municipalities) are cash-starved and not receiving as much funding from the federal government as desired.”
Argentina has seen accelerated adoption of cryptocurrencies as the country struggles with enormous debt obligations and high inflation.
A few months back, Settle Network launched stablecoin Argentina (ARST) on Stellar blockchain. Meanwhile, in Mendoza, law enforcement launched an investigation against an investment site for running a Bitcoin scam besides being involved in money laundering and tax evasion. Kruger added,
“Could eventually end up with a myriad of Argentine shitcoins backed by either nothing or things such as mining royalty interests. Doing so would be against the law at present. But desperate governments are capable of desperate actions.”