Argentina's president open to Bitcoin and CBDCs, central bank divided

On August 13, according to foreign media reports, Argentine President Alberto Fernandez said in an interview that he was open to the adoption of Bitcoin, but the country’s central bank had a different stance.

In an interview with local media on August 12, Argentine President Alberto Fernandez responded to questions about CBDCs and Bitcoin, and whether he would even recognize Bitcoin as legal tender like El Salvador, saying that although he still has skepticism, he agrees that cryptocurrencies will play a greater role in Argentina's economy. He added: "The benefit of this is that the inflationary effect is largely offset."

Despite Argentina’s strict currency controls, he noted that Bitcoin is increasingly viewed as a hedge against inflation in the global economy, though Fernandez was careful to note that it is still very early days for the cryptocurrency industry.

But while the president is open to developing digital assets, Miguel Pesce, the head of Argentina’s central bank, appears to want to crack down on the industry. Speaking at Argentina’s Financial Executive’s Digital Finance Forum on August 10, Pesce took aim at cryptocurrencies, describing digital assets as a threat to economic stability and foreshadowing stricter regulation of the industry. He asserted that BTC cannot create value for investors beyond short-term hype cycles, and likened Bitcoin to a commodity.

When regulating the industry, the central bank hopes to prioritize "preventing low-end investors" from using crypto assets. However, in May, reports showed that retail cryptocurrency mining in Argentina was booming, and last month, Canadian mining company Bitfarms proposed a blueprint for expansion in Argentina.