In January, President Javier Milei’s State Secretary took to the social media platform X to celebrate a new milestone for the country. The nation had just witnessed its first-ever crypto rental contract, with a landlord and tenant agreeing on a monthly fee of 100 USDT for an apartment in the Argentine city of Rosario.
Argentina, a nation with a history of widespread crypto technology use, has previously seen citizens turning to stablecoins and virtual currencies. They regularly utilize these digital assets to bypass tax revenue controls, safeguard their savings from local currency devaluation, and facilitate cross-border transfers amid numerous regulations and red tape.
However, under President Javier Milei, new regulations are paving the way for an expanding array of real-world use cases for crypto.
Within weeks of assuming office, the 52-year-old libertarian president introduced a comprehensive decree aimed at significant deregulation. It encompasses hundreds of aspects of the Argentinian state. Reducing red tape, delivering substantial cuts to public spending. But also very particular measures such as streamlining the process for individuals to obtain a divorce without requiring lawyers or enabling soccer clubs to seek private investors.
Milei and crypto
In the crypto realm, this sweeping deregulation initiative opened the door for a number of real-world use cases. Notably, Milei decreed that contracts in Argentina are no longer legally tied to the volatile Argentine peso. Instead, transactions can be conducted in any currency or means of payment agreed upon by both parties. Stablecoins, euros or U.S. dollars would compete with the Argentine peso.
This regulatory shift marks a notable change in the housing market. It unlocks new possibilities for tenants and landlords to explore alternative rent payment methods. “We ratify and confirm that in Argentina, contracts can be agreed upon in Bitcoin and also any other cryptocurrency and/or asset,” Mondino said.
According to the decree, any debtor must deliver the corresponding amount in the “designated currency, whether or not the currency is legal tender” in Argentina.
Milei and cautious optimism among crypto companies
Industry experts are enthusiastic about this agenda. This shift could pave the way for significant innovation and widespread adoption of cryptocurrencies in various real-world economic use cases.
“There are winds of change. We are already seeing measures that will impact the industry,” says Manuel Beaudroit, CEO and founder of the crypto company Belo, to Fintech Nexus. “This will affect the entire local ecosystem, as Argentina has too many arbitrary regulations. The competition between currencies gives us more market relevance.”
Santiago Mora, a lawyer specializing in the sector, celebrates a stance of regulating “only the essential”. An excessive legal burden, he says, could be hazardous for Argentina’s crypto and fintech industries. “These businesses are very innovative. There is a high chance that specific regulation will overestimate the risk. This would constrict and hinder their development or even kill them outright.”
A fragile economy
Despite Milei’s new measures injecting fresh life into the sector, Argentina’s economy is still reeling from a years-long economic crisis. Triple-digit inflation and economic stagnation remain formidable challenges for the country.
Moreover, part of Milei’s economic agenda includes significant spending cuts as the libertarian seeks to eliminate the deficit. This is likely to push the Argentine economy into a recession. This week, the International Monetary Fund revised its annual GDP outlook, projecting a 2.5% contraction. However, it predicts a rebound of around 5% for 2025 once (and if) the drastic adjustment measures bear fruit.
With rising inflation – it already reached 25% monthly in December – and prospects of declining wages, it remains to be seen how much disposable income Argentine families have for investing in stablecoins – a preference among Argentine users – or for conducting other operations.
In addition, Congress is already challenging some of Milei’s most radical propositions. There, the libertarian has yet to pass significant legislation. However, crypto specialists are confident that the benefits could outweigh the challenges if at least some of Milei’s deregulatory agenda is implemented in the long term.
“I’m not expecting the state to help me; I’m just hoping it takes its foot off our neck,” says Beaudroit.
