Will Argentina’s President Javier Millay Accept Bitcoin?

Argentina has sworn in liberal capitalist Javier Millais as its new president yesterday. Hailing from the Austrian School of Economics, Milley could see Bitcoin rise more than 200% this year as a solution to the mismanagement that once plagued Argentina's economy.

Miley is now facing financial and social problems that have forced many young citizens to leave the country. He plans to cut government spending by 5% and has signed a presidential decree to cut half of government ministries.

Javier Milei faces a daunting challenge to fix Argentina's economy.

The devaluation of the Argentine peso was partly caused by inflation, which led to the circulation of higher banknotes in the country. The country fired its money printers after its ninth sovereign default prevented it from borrowing on the capital markets.

Now, JPMorgan predicts that the country's inflation rate will closely match that of Zimbabwe and Sudan. Goldman Sachs economist Alberto Ramos said Argentina could become a new market success if Miley pulls off an unlikely coup.

“He might try to do the right thing, but he might not. You're dealing with nitroglycerin. It can ignite overnight. Once you start the economic adjustment, you can control it,” Ramos said.

According to Guido Moscoso, manager of public opinion at Opinaya, Argentina has only had two liberal and pro-market reforms in the past 50 years. In order to control the high inflation and accept Bitcoin, Miley will have to change the economy. But doing so and maintaining its popularity will require being “smart and pragmatic.”

But, like other politicians promoting Bitcoin in the US and elsewhere, it's hard to say how successful Milley will be. Miami Mayor Francis Suarez has pulled out of the 2024 presidential race, losing hopes of White House support, despite uproar over accepting bitcoin salaries for news agencies.

Read More: How to Receive Crypto Payments: A Brief Guide

Another incumbent, Florida Governor Ron DeSantis, who passed an anti-central bank digital currency bill and expressed support for Bitcoin, will likely take over the state for former President Donald Trump. Anti-CBDC candidate Robert F. Kennedy recently decided to run as an independent candidate, which could reduce his chances of winning.

Is Bitcoin the Solution to Argentina's Hyperinflation?

During his run for president, Miley promoted bitcoin as a way for Argentina to dig itself out of its economic woes. Earlier this year, a paper by the Financial Action Task Force and the Financial Stability Board argued that cryptocurrencies allow people to bypass central bank policy. Still, Miley's anti-central banking stance means he may not consider introducing crypto as a detriment to fiscal policy.

The President of El Salvador, Naib Bucale, recently celebrated the country's Bitcoin bet. The government currently holds around 2,700 BTC and has earned $3 million in unearned profits. Instead of the International Monetary Fund's recommendation, he adopted bitcoin as legal tender, but Bucke denied that buying bitcoin was the right move.

Read more: What is Cryptocurrency Mining?

Other government efforts, like Bitcoin mining projects in Bhutan, have adopted the technology to boost the region's education sector. The success of the project depends on how events such as the upcoming halving will affect the mine's profitability.