Will Argentina Become the Next El Salvador as Severe Inflation Fuels Bitcoin Adoption?

The Argentine National Securities Commission (CNV) and the Salvadoran National Digital Assets Council (CNAD) held a meeting on May 23 to exchange experiences on BTC regulation and adoption, and discussed the possibility of signing a cooperation agreement. With the exacerbation of hyperinflation, could Argentina be the next El Salvador?

Argentina and El Salvador Continue Dialogue

According to the official website of Argentina, Roberto E. Silva, President of the Argentine National Securities Commission (CNV), and Vice President Patricia Boedo, met with Juan Carlos Reyes, President of the Salvadoran National Digital Assets Commission (CNAD), on 5/23 to discuss the use of cryptocurrencies in the economy, particularly focusing on El Salvador's experience of adopting Bitcoin as legal tender.

Roberto E. Silva, President of the Argentine National Securities Commission, expressed a desire to learn from the valuable experience of the Salvadoran National Digital Assets Commission, stating:

We hope to strengthen our relationship with El Salvador, therefore, we will explore the possibility of signing a cooperation agreement with them.

Argentine officials had actually visited El Salvador in mid-March and participated in a technical meeting organized by regulators - a key element for the development and regulation of the securities market.

Argentina Regulating Virtual Assets - A More Friendly Approach?

As reported earlier, the Argentine National Securities Commission (CNV) advanced the registration system for Virtual Asset Service Providers (VASPs) on March 25. Given that Argentine President Javier Milei had praised Bitcoin multiple times before the election and criticized the constant inflation of fiat currency, some Bitcoin enthusiasts were dissatisfied with the new regulatory measures.

According to CriptoNoticias, the Argentine National Securities Commission (CNV), the Financial Information Unit (UIF), and the Argentine Chamber of Fintech have been actively communicating since April and are working on new regulations for Bitcoin transactions.

CNV President Roberto E. Silva stated that the government is open to dialogue:

We will listen to their opinions, make every effort to understand them, and then we will decide on the best way to ensure compliance with the standard objectives, while trying not to impede activities.

Spokespersons for CNV and UIF assured that meetings with various industry stakeholders will continue in the coming months. The plan aims not only to ensure that regulation is conducted "in a transparent manner," but also to establish channels for the implementation of new rules.

With the cooperation between Argentina and El Salvador, CriptoNoticias interprets that the regulations may be more "friendly" and there may not be too many restrictions in terms of adoption, development, and business opportunities.

Rampant Inflation Drives Adoption of Bitcoin in Argentina

Argentina's new right-wing liberal President, Javier Milei, took office at the end of last year and announced a series of radical economic shock therapies, devaluing the Argentine peso by more than half. Analyst David Puell of Ark Invest previously pointed out that amidst economic challenges, Argentina's relationship with Bitcoin is rapidly evolving. Facing the dilemma of rampant inflation, Argentinians are seeking alternative solutions to protect their wealth.

According to data from TradingView, the Argentine peso has devalued by 278% in the past year, and a staggering 1909% over 5 years, indicating that survival with the local currency is virtually impossible.