Argentina Bans Destruction of Peso Amid Economic Crisis and Rising Crypto Use

Argentina has made it illegal to burn or tear its national fiat currency, the peso, within soccer stadiums in Buenos Aires. The Argentinian government, in response to the country’s rampant inflation exceeding 100%, declared on August 10th that any destruction of the peso (ARS) would be considered a criminal offense.

Neighboring country soccer fans have been deliberately tearing and burning peso notes in stadiums to taunt their Argentine rivals. To counter this, the Agency for the Prevention of Violence in Sports has announced that law enforcement will apprehend those responsible, subjecting them to potential imprisonment for up to a month. Additionally, the clubs these offenders support could face financial penalties.

Argentina is grappling with a severe economic crisis, evident in the fact that essential goods’ prices have more than doubled since mid-2022, according to data from the Argentina Institute of Statistics. Simultaneously, the country’s citizens have been increasingly turning to cryptocurrencies to bypass capital controls, making the movement of funds in and out of Argentina more complicated.

The nation’s foreign exchange rate has also experienced a significant drop, with 1000 ARS currently being worth $3.49. In response to this, Argentina’s central bank introduced a new 2000 peso note to discourage citizens from carrying large amounts of cash for daily expenses.

Despite these efforts, statistics from financial market analysts at Triple-A show that the percentage of Argentinians owning cryptocurrency has risen from 2.9% to 5.6% over the past year. This shift translates to around 1.2 million new crypto users in the country within the last 12 months.

Media reports in March 2022 indicated a growing trend among Argentinians to choose Bitcoin (BTC) as their preferred form of payment due to waning confidence in the peso. At the time of writing, 1 BTC was equivalent to approximately 8.4 million ARS.

Regarding global cryptocurrency adoption, Argentina currently ranks 13th among 146 countries, with its citizens constituting about 8% of the global crypto user base, according to Statista.

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