We’re seeing it happen in far too many places. Argentina is just the tip of the iceberg.
Financial crises are destroying economies
Argentina for example is struggling, as investors fear Latin America’s third-largest economy will default on debt.
The news comes not long after Argentina’s government requested a $50 billion loan from the International Monetary Fund (IMF). At the moment, the Argentine peso crashed to record lows, hitting 39 pesos against the U.S. dollar.
The central bank increased the amount of reserves in a bid to tighten fiscal policy and shore up the currency. It hiked rates by 15 percentage points to 60 percent from 45 percent.
Worse, “Real rates are not tight enough to encourage capital inflows (so) the economy is likely to contract this year,” Deutsche Bank analysts noted, as quoted by CNBC.
With the value of paper money decimated by inflation, it has destroyed purchasing power
With prices now spiraling out of control, accompanies by falling currency valuations, cryptocurrencies can help solve the problem. That’s because it offers a bit more stability.
However, it’s not just Venezuela that’s turning to cryptocurrencies
Latin America is quickly turning to cryptocurrencies for stability.
In Venezuela for example, hyper-inflationary issues have crippled the economy. As a result, the Dash coin has become popular. In fact, now more than 200 merchants accept it, including Subway and even Calvin Klein.
The region is even seeing thousands of wallets downloads every month.
“We’re seeing this with Turkey right now. Ukraine, Argentina, these are countries with very high inflation rates with of 20-30% or something. 20-30%, we think is enough to get people to try something new. We’re going to try and be successful first in Venezuela before branching out to try this in other countries,” reports Business Insider.
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