Argentinian Town Mines Crypto to Improve Finances

  • Crypto adoption is booming in Argentina.
  • A small town is challenging the central government by starting mining operations.
  • Grassroots adoption is key to widespread adoption.

A recent survey found that cryptocurrency adoption is surging in Argentina. It is estimated that 12% of Argentinians had already purchased cryptocurrencies and that a further 18% were considering it. These figures put crypto adoption in Argentina ahead of Peru, Mexico and Brazil and makes the country rank tenth in Global Crypto Adoption Index by Chainalysis. The principal reason cited for this surging interest in cryptocurrencies is the persistent high levels of inflation that the country has experienced. Bitcoin and other cryptocurrencies are viewed as a way to preserve one’s savings and livelihood. Some Argentinians are also taking part of their salary in crypto in order to save on banking fees. An Argentinian politician even proposed a law to allow salaries to be paid in Bitcoin last year.

The growing cryptocurrency scene in Argentina was dampened after the IMF and the government of Argentina jointly agreed to “discourage the use of crypto-currencies” as part of a restructuring plan. A town called Serodino in the province of Santa Fe is challenging these guidelines and ignoring the various warnings that the government has issued over the past year, however. The mayor of the town, Juan Pio Drovett, has decided to mine cryptocurrencies to combat the town’s economic problems after considering numerous options. Proceeds will help in building rail infrastructure and to offset the financial problems created by the pandemic. As the mayor declared, this is not a speculative venture, but a situation in which “we will always win”. The decision was seemingly welcomed by the local community as well as other partners in the public and private sector. Should this town’s efforts succeed, it will likely expand its operations and inspire other cities across Argentina to do the same. This viral grassroots adoption could then force the government to legalize Bitcoin and other cryptocurrencies despite its best efforts to contain it. This is also because Bitcoin may become an increasingly important electoral issue as communities start feeling the beneficial impact of Bitcoin adoption.

A small Argentinian town challenged warnings by the IMF and the government of Argentina by starting crypto mining operations. This grassroots adoption could spread throughout the country and beyond. When a tipping point is reached, central governments may become powerless to stop broader Bitcoin adoption and legalization.

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