Inflation figures were revealed in Argentina last week, with the Consumer Price Index (CPI) hitting record highs of 78.5%. This puts the country second only to Venezuela in Latin America in terms of high inflation, with prices rising nearly 8% during August, hitting Argentina’s pockets. aAccording to a survey by Bitso, this Argentines were pushed to explore cryptocurrencies as a way to maintain their purchasing power over stablecoins.
Inflation in Argentina continues to grow, and is expected to reach 100% this year
Inflation has become a major problem for some countries in LATAM whose economies have been affected by the current economic downturn. Argentina, one of the largest economies in the region, is facing raging inflation levels that affect the pockets of citizens. Latest CPI Report open Prices are up 7% MoM (MoM), with these numbers second only to inflation in Venezuela, which reached over 100% YoY (YoY).
Food and beverage prices rose 7.1% in August, while other goods registered a sharp increase, such as clothing and appliances. Cumulative inflation figures reached 78.5%, the highest since 1991 amid a climate of economic and political uncertainty, with the country’s three economy ministers in less than three months. The Argentine peso is one of the fiat currencies that has suffered the most in Latin America, losing more than 25% against the dollar when looking at the official rate, and about 50% of its value taking unofficial “blue” exchange rates as a reference.
Cryptocurrencies are booming in emerging markets
The poor performance of the Argentine economy has prompted its citizens to explore alternative ways to preserve their purchasing power against inflation, and to look at cryptocurrencies and stablecoins even under the current negative price trend. While Argentina is no longer among the 10 most crypto-adopting countries, according to Chainalysis, local studies confirm that adoption continues to grow.
newly exploratory study Conducted by Bitso, a cryptocurrency exchange based in Mexico, indicated that there is a high level of awareness regarding crypto assets in Argentina. The survey found that 83% are familiar with cryptocurrencies, with nearly 34% having specific knowledge of these tools.
Also, out of the 83% who are conscious of cryptocurrency, 10% already or currently own crypto assets as part of their investment portfolio, while almost 23% would like to acquire them in the future. The focus of these investors in owning cryptocurrencies is to use them because they will use fiat currencies, and to maintain their savings even with such inflation numbers.
What do you think of the recent inflation figures in Argentina and the popularity of cryptocurrencies? Tell us in the comments section below.
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