Argentina had a murky past in matters regarding money exchanges, black market and extremely high inflation which finally led to loss of confidence in its locally circulated currency Peso. Populist governments such as this particular Latin American country always weighs more on devising creative plans for dealing with liquidity crisis scenarios rather than taking the technical route. Argentina was shaken to the core by two events of great economic importance which made them sit up and take notice of Bitcoin as the perfect deflationary currency.
On 1st December 2001, the government froze all bank accounts for one whole year allowing only bare minimum withdrawal and that too for household necessities. This event was termed as Corralito. The people of Argentina could only access their savings normally from December 2002 but it had already depreciated to a quarter of its original holding.
Exactly 10 years later, in 2011 the former president Cristina Kirchner came ahead with the “Cepo” exchange control with an aim of reviving the symbols of hyperinflation which have been springing up since 1980s. The normal stores with black market exchange known as “Cuevas” served as a den for those who wished to sale off dollar at a higher rate than that prescribed by the official government exchange rate. Such a setup actually coerced the market to pay double. The “arbolitos” or money-changers could be found lingering around the nooks and corners of tourist spots.
Two years since the emergence of Bitcoin, the people of Argentina felt that their national currency could not live up to the dynamism and potentiality of this cryptocurrecy form. They also felt betrayed by the Argentinian Peso and its heavily manipulated exchange rates. Thus it was very obvious that Argentinian folks would come together and channel out a mass exodus from the national currency to this new digital deflationary variant. The 2011 crisis of Argentina placed it ahead of its Latin American counterparts such as Brazil in terms of cryptocurrency adoption which could not understand the real flavour of Bitcoin until its 2014 crisis. Wall Street honchos with their bulky bank balances and plush penthouses might not understand the fact that Bitcoin is becoming a necessity with each passing second. But ordinary people who earn a stipulated amount on month end and are toiling hard to keep the evils of inflation at bay, are increasingly leaning on Bitcoin to help them survive in such troubled times. This is the sole cause behind Buenos Aires hosting the highest density of Blockchain / Bitcoin stores and start-ups accepting Bitcoin for fuelling transactions.