Argentine Peso Crypto Trading Volume Grows by 400% This Year

Argentines are increasingly using their local currency to trade digital assets , prompting the peso to have the biggest increase as a crypto trading pair in Latin America, according to the latest State of LatAm Crypto Markets report from Kaiko Research.

The Argentine peso monthly trading volume against crypto is up by 400% this year, by far the highest increase among its Latin American neighbors. Crypto trading volume against the Colombian peso was the only other pair to increase, but only by 40%, while trading against the Brazilian real and Mexican peso declined, according to Kaiko.

The impressive jump, according to Argentine’s in the country, comes from fear-induced dollar purchases prior to Milei’s election on Nov. 19, 2023. That fear, according to José Luis del Palacio, co-founder of Argentine exchange Decrypto, is what led to the increase of usage of pesos across crypto exchanges.

“The demand is due to an expectation creep before last year's election, and the possibility of even further devaluation of the peso,” he told The Defiant.

Del Palacio explained that before the elections “nobody stayed in pesos” and that’s what drove the demand for digital dollars.

But, when Milei’s government was elected, the devaluation didn’t take place. In fact, people had to sell dollars–dropping the free exchange rate from $1,300 ARS per USD to $970 because people had to pay their bills, and other financial responsibilities, Del Palacio said.

However, now the market has “cleaned” those savings, and the dollar is back to $1,350.

Slowing Inflation

Argentines are now more willing to transact in their local currency as the country’s inflation rate is declining at the steadiest pace since last year.

“It’s quite expected that [Argentines] would use more pesos for crypto purposes,” said José Luis del Palacio, co-founder of Decrypto, an Argentina exchange.

“There has been a marked decline of inflation, which could be leading the Argentine peso to be more used on local exchanges,” Manuel Ferrari, co-founder of Bitcoin-backed stablecoin protocol Money On Chain, and a board member of the Bitcoin Argentina NGO.

Official data from the country’s National Institute of Statistics and Census (INDEC) show that inflation in May was 4.2%, marking a fifth consecutive monthly deceleration. The number –is the lowest it's been since January 2022, when it hit 3.9%.

Still, at $400 million of monthly volume, the Argentine peso (ARS) continues to be the lowest trading fiat currency in the region, as it continues to have some of the highest annual inflation rates in South America, even as the rate of price increases is starting to decline.

Annual inflation rate is at its highest point in decades, reaching 290% in April. The IMF does predict a significant reduction is on its way, with the country ending the year at an estimated 149% and 59% in 2025.

USDT Pulls Ahead

Increased crypto trading volume in Argentina shows that as Argentines continue to search for savings and investment alternatives to the peso, with the currency still depreciating at a double-digit rate monthly and currency controls that limit access to the U.S. dollar,, digital assets are a good option.

Across Latin America, it is hard for individuals to get access to USD, leading them to look for alternatives. According to Kaiko, the alternative of choice appears to be Tether’s USDT–with more than 40% of all trades in the region using the stablecoin.

Bitcoin and Ethereum trail in second and third, respectively, while the second-largest stablecoin in the market, USDC, isn’t even a blip in the radar.

According to Del Palacio, the cryptocurrency market is starting to flow freely thanks to the gradual release of restrictions by Milei’s government. His words align with what industry leaders in the country are trying to do with Crecimiento, a Crypto Silicon Valley in Buenos Aires that is gearing up for its own pop-up city in Buenos Aires in August.

“We’re expecting to see a plethora of other blockchain-based services be added to our local market,” he said.

And in terms of overall usage, del Palacio said that the trend is always up for cryptocurrencies in Argentina, “since people and companies trust more in global and private mediums of exchange than the local centralized alternative.”

He concluded that the 400% figure is likely going to drop below the triple digits.