Bisnis.comJAKARTA — Crypto proven to be able to be a solution in the midst of crisis conditions. When a country experiences a crazy spike in inflation and its currency exchange rate gets worse. The conditions in Argentina are a clear example of this phenomenon.
A report by Lemon Cash, a cryptocurrency exchange operating in Argentina, estimates that crypto users in Latin America will reach 40 million by 2023, of which 4 out of 10 people will come from Argentina.
Lemon Cash Head of Compliance Alfonso Martel Seward explained that in general crypto is society’s way out of the devaluation of the Argentine peso which continues to worsen.
“We have very high inflation, and to buy currency foreigners have many restrictions, especially for ordinary people. “This makes crypto the most relevant choice for saving,” he said when providing information in the Chainalysis Research Institute report, quoted Saturday (23/3/2024).
In fact, Martel joked that while in other countries only a handful of people follow foreign exchange movements, in Argentina almost everyone knows and monitors movements in their country’s peso exchange rate against dollar United States (US).
It’s not surprising, that’s why around 80% of the total crypto users in Argentina prioritize owning aka stable coins stablecointhen the rest for investment in Bitcoin or other altcoins.
Stable coins themselves are crypto whose value is pegged to a currency or commodity in the real world. For example, USDT Tether made by Tether Limited and USDC (USD Coin) made by the Center Consortium whose value is consistently around US$1 with a slight difference.
“As crypto adoption increases, many people here now after getting a paycheck immediately put it into USDT or USDC,” he added.
This phenomenon is also considered an opportunity for Lemon Cash to start opening debit card services related to crypto accounts. As a result, Lemon Cash users who have no savings other than crypto can still shop at supermarkets or restaurants that accept debit card payments.
Currently, Lemon Cash claims to have a user base in Argentina of up to 2 million people for this product, where they actively use the Lemon Cash debit card for daily transactions.
Can Crypto Become a Currency for Digital Transactions?
Crypto adoption in a country cannot be separated from the related policies and regulations in that country. In Argentina’s case, adoption was strengthened due to force majeure resulting from a weak economy and extreme inflation spikes.
Argentine President Javier Milei, who took office in December 2023, also tends to have a progressive approach to the use of alternative exchange rates, including crypto, for everyday life.
In fact, Milei actually wants to close his country’s central bank and completely reduce the use of the Argentine peso, especially towards the US dollar.
For example, one of the realizations is illustrated by the emergence of progressive policies in Argentina that bitcoin or crypto is legal as a basis for rental payment agreements for property, apartments or boarding houses.
Pintu Academy explains that there is a fundamental difference between saving money into US dollars and saving into USDT or USDC, as Argentines do.
The habit of buying crypto is indeed the fruit of the digital era of financial transactions. However, the emergence of Bitcoin has added a new dimension to the world of finance by offering a different decentralized alternative to conventional digital money.
The difference is that digital money is a digital representation of fiat currency, such as the Indonesian rupiah or Argentinian peso. Of course, in a country like Indonesia which is doing well, digital money in rupiah is a mainstay in online transactions.
Digital money allows users to make transactions quickly and easily within the country and can now even be used in neighboring countries such as Malaysia, Thailand, Singapore and others.
“However, this system comes with certain limitations such as transaction fees which can be expensive, transaction limits determined by the service provider, and transaction completion times which can take up to several working days,” explained the Pintu Academy team.
Trust in third parties is also at the core of centralized digital money systems, where user funds are managed and controlled by service providers, thereby demonstrating dependence on a central authority in managing transactions.
Meanwhile, Bitcoin offers a decentralized model using blockchain technology. Bitcoin not only allows unlimited transactions, but also gives users the freedom to send or receive money without the need for a third party.
Bitcoin transactions can be completed within 10 to 60 minutes, providing significant efficiency compared to traditional payment systems.
One of the main advantages of Bitcoin is also its fee structure. Bitcoin transaction fees are determined by the user and depend on network conditions.
“This provides greater flexibility compared to the fixed fees charged by digital money providers,” he added.
The essence of the difference between Bitcoin and digital money lies in the concept of decentralization and centralization. Bitcoin operates an open network in which anyone can participate without needing authorization from a third party, making it resistant to censorship and manipulation.
In contrast, centralized digital money requires trust in the institutions that manage and control access to funds.
Both systems have their roles in the digital financial ecosystem, with Bitcoin offering an attractive alternative for those seeking greater transparency and control over their finances.
Check other News and Articles at Google
News and WA Channel