The use of bitcoin has more than doubled in the past year in Argentina as government controls have delivered economic stagnation and double-digit inflation, according to the London, U.K.-based Financial Times. The government has restricted access to foreign currency and created an overvalued currency exchange rate.
One small business owner, the owner of a budget hostel in Buenos Aires, has found bitcoin helpful in the face of the country’s overvalued currency exchange rate. She takes credit card payments from foreign tourists in return for bitcoin. She can then sell bitcoins on Argentina’s unofficial currency market for 50 percent more than she would get at the official exchange rate.
Argentines Distrust The Formal Bank System
Franco Daniel Amati, a co-founder of Bitcoin Argentina, says bitcoin’s prospects remain strong in Argentina as only half the population entrusts their money to the formal banking system.
Raids on currency trading houses and other government measures have driven the peso’s black market value to its lowest levels since the country defaulted on its