Hola, Argentinian-American here. I’m moving back to Argentina next month to work with My First Bitcoin (Mi Primer Bitcoin) to kick off community-driven Bitcoin education. Let’s talk about what’s going on in Argentina at the moment, shall we? As a disclaimer, it's important that I remain politically neutral in my role as a Bitcoin educator; this is not a pro- nor anti-Milei post.
After his surprising primary victories last week, the global media is getting Milei’s monetary policies all wrong. I’m here to set the record straight. I’ve found recent coverage frustrating because very basic due diligence isn’t being performed by supposed journalists; a sign of the times where outlets simply regurgitate whatever’s going to get the most eyeballs on their platform as their staff simply copy and paste their way into oblivion.
What Milei is proposing (the MSM is getting this part right, truth be told) is that Argentina abolishes the BCRA (Banco Central de la República de Argentina), which will inevitably leave a void and hence kick off a competition amongst the population as to which currency will drive the economy.
He’s proposing exactly this: a “currency competition”, which will inevitably lead to dollarization. Argentina has been dollarized by default for as long as I've been alive (I'm 42). It’s been a never-ending game of hot potato with one’s pesos. You simply get rid of them ASAP. You budget what you need for the week (now it’s down to daily needs thanks to 120+% inflation), and then the rest you flip into USD for long-term holdings or you plow those pesos into hard assets. With the elimination of the Central Bank, people will be free to use whatever they wish, but the fact remains that 80% of global commerce is in USD and Argentinians have chosen the US dollar decades ago.
This is an important distinction to make: there is no coercion in Milei’s plan: he’s actually proposing the elimination of monetary coercion by the Argentinian Central Bank and returning money back to the private sector, back to open markets. Dollarization is the obvious solution to Argentina’s back room dealing with the IMF (Argentina’s responsible for 60% of the IMF’s balance sheet, in fact). Milei has gone on the record by simply acknowledging that there is quite literally zero demand for the national currency, which fundamentally renders the Central Bank useless. So, the narratives stating that “Milei will dollarize the country” are misleading. There’s important nuance to the matter. He simply wants to eliminate the Central Bank and leave a void for the open market to fill. Coercion simply doesn’t figure into the calculus.
Argentina will most likely end up looking similar to the mix we’re seeing in El Salvador currently: mostly digital dollar usage in the form of stable coins with early adopters saving in Bitcoin and spending on Lightning Network rails. With over $70B of actual physical dollar bills already in the country, hopefully the transition will be quick. Ecuador was able to successfully navigate a similar change in about 24 months two decades ago; with the advent of stable coins and all sorts of neobanks popping up, the liquidity of the dollar has never been higher in South America. By no means is the dollar a panacea, but it's the clear near-term choice.
OK, that’s it. It’s important that you walk away from this blip knowing that Milei's plan is to leave the country’s currency in the hands of the markets, it’s just that dollarization is a foregone conclusion. It’s important that as a Bitcoin educator I don’t get involved in dumb fiat politics, but I wanted to clear up this issue as Milei continues to grow in global popularity.
Shameless shill: We need funding for community-driven Bitcoin education and I plan on also providing boots-on-the ground reporting from Argentina (maybe using Habla as my platform of choice?). We need funds for classrooms, printing workbooks, promotion, teacher salaries, etc. Mi Primer Bitcoin has a Geyser fund set up, not to mention you can donate directly on our site. Feel free to zap the sh*t out of this note as well!
As inflation continues to push monetary implosion in Argentina, Bitcoin education is more important than ever and I hope you’d consider partnering with me in orange-pilling a pivotal player in the peaceful monetary revolution. Saludos!