Bitcoin supporter Javier Mailay. Bitcoin Supporters elected Javier Millais as President. These sentences have been repeated by several outlets, content creators or social media accounts focused on the Bitcoin space, all encouraging Argentina’s new president to enact policies that favor the growth of an ecosystem that has long been one of the leading sectors. I did. country in terms of adoption within the region. But why?
On July 26, 2016, Mylay made her first appearance on an Argentine late-night show. stray animal, now hosted by friend, journalist and TV host Alejandro Fantino. There, Miley’s appearance, with her bushy hair, outspoken behavior, and most importantly, her advocacy of liberal ideas, quickly gained a foothold before being widely circulated in the national media. Soon after, Milei’s rant also started going viral on the internet.
Milei spent years writing and speaking about the Austrian economy, but it was television that laid the foundation for his meteoric rise in politics. Milei’s growing popularity has coincided with Bitcoin itself gaining more traction in Argentina and throughout Latin America. For many Bitcoin miners in the region, the journey down the rabbit hole and the resulting exposure to the failures of the monetary system likely influenced Milei’s voice in part.
When Milei mentioned Bitcoin’s potential in early 2017, it wasn’t shocking at the time. Most of his comments praised the technology’s ability to recover money from central banks. Nonetheless, in 2019, Milei confessed that he had not yet studied Bitcoin in depth. Despite calling Bitcoin a “perfect concept” in 2021, other interviews from last year suggest that the Argentine president is still in the process of fully understanding it.
Considering that Milei is already perfectly aligned with the Bitcoin ethos of money, central banks, taxes, the role of government, and many other aspects of the economy and politics, the closer he gets to Bitcoin, the more the community will embrace his antics. It’s no wonder they love action. world stage.
In many ways, Milei’s Bitcoin journey seems very relevant, but still incomplete. But unlike most, as he assumes the presidency, he now has a much more complex task. The goal is to rescue Argentina from the vicious cycle of hyperinflation.
argentina problem
A week before Argentina’s elections, annual inflation hit 142.7% as the economy continues to struggle as a result of policies that Mailay has criticized for years. It was this that fueled Argentina’s desire for change and ultimately propelled Milei to victory on November 19. That very night, Milei said that his goal was not only to solve today’s problems, but also to get Argentina back on track. It was destined to become a world power in the early 20th century.
After the election, Milei said,I do not have money”(There is no money) There is no money to account for the current fiscal deficit that Argentina is experiencing. Cutting public spending, along with ratifying the promise to close central banks, has been one of the key points emphasized by the new Mailay administration. Failure to do so would inevitably lead to hyperinflation, according to Milei.
In addition to this, Argentina and Millais will have to deal with a huge debt to the IMF, more than $31 billion at the time of this writing. Although Millais pledged that Argentina would repay its debt, many have pointed to the agency’s warnings about El Salvador as one of the reasons Argentina will not soon embrace Bitcoin.
Speculation about this stems from a non-binding letter of intent sent by former Economy Minister Martin Guzmán to the IMF in March 2022, in which he explained that the country would implement stricter anti-money laundering controls to “curb the use of cryptocurrencies.” . Banks have a strict ban on cryptocurrency transactions, but this has hardly stopped their use. In particular, the availability and ease of access of USDt makes it one of the options for escaping the dwindling Argentine peso.
Milei’s other prominent policy, dollarization, appears to be at odds with hyperbitcoinization, but it is a much-needed step to start fixing Argentina’s economy. Speaking at LABITCONF, new Prime Minister Diana Mondino said Miley’s government would move beyond the dollar to abolish mandatory fiat currency and instead allow people to choose their own currency. By the numbers, many Argentines already prefer USDt “criptodólares”, as the locals call them.
During the campaign and as he prepares to take office, Mailay said the impact of the previous administration’s policies and spending will be felt at any point during the 18 to 24 months in office. For others, such unpopular remarks would have cost them hundreds of thousands of votes. For Milei, this is an extension of the very principles he campaigned on (low time preference), many of which made the Bitcoin community go his way in the first place.
What Bitcoin Investors Are Saying
Milei’s “chainsaw plan” will take time, and luckily many Bitcoin users understand that it will happen gradually if Argentina works harder for Bitcoin adoption. JAN3 CEO Samson Mow has consistently said, “Miley’s priorities are to stabilize inflation, move toward the dollar, and ultimately close central banks.” Only then will governments be able to consider what Bitcoin can do for the country.
Nonetheless, Argentine Bitcoin miners generally seem more excited about the broader prospects of Milei’s victory. For Manu Ferrari, Mailay’s commitment to freedom is “good enough for next year”. This is a sentiment shared by most people familiar with the intricacies of Argentina’s dysfunctional economy.
When El Salvador passed a Bitcoin law, the Central American country set the first precedent for what the adoption of a nation-state could look like. Nonetheless, limiting the scope of Bitcoin adoption to that degree is short-sighted at best. If free circulation of competing currencies is the goal of the Maillay administration, it is fair to say that after years of implementing currency controls, the policy may already be beneficial to Bitcoin.
A more comprehensive national strategy that considers eliminating capital gains taxes, investigating Bitcoin mining, or even selling Bitcoin-backed securities is only viable if Mailay corrects the direction of Argentina’s economy. Meanwhile, the sole promise of freedom should translate into the disappearance of recent anti-cryptocurrency measures as countries embrace more free market policies.
Now the main goal of the new government is to stop the bleeding, which is achieved by implementing a number of shock measures, all of which “I do not have money” Problem. The current Millay administration still has to figure out inflation, chart the dollarization process and plan for central bank closures. Mauricio Macri is the first liberal president in Latin America, standing as the only president to have served his term outside of the left-wing Peronist ideology. It was quite an ordeal for me.
Bitcoin’s emergence as a true asset class has largely occurred in a laissez-faire environment, with regulations still struggling to keep up with developments. At least this is what people can expect from the Millay government, which has promised to cut the numerous taxes that plague Argentina’s day-to-day economy.
The JAN3 team hopes to approach Milei and his colleagues on the topic of Bitcoin in 2024, with conversations stretching back to last year. By then, the world should be able to see more clearly what his vision for Argentina looks like after the initial deployment of the chainsaws. .
Until that time comes, Bitcoin users are confident that this freedom-loving politician, who sees Bitcoin as the second coming of private money, has all the tools necessary to fully understand its implications and eventually get Argentina to adopt it for its long-term benefit. You can be sure of that. This country.