Are you going to travel to Argentina? See how the digital dollar can help you save on exchange

“Blue”, “Luxo”, “Coldplay”, “Qatar”: these are all names of dollar variations traded in Argentina, amid the strong inflation that shakes the Argentine peso and makes the government control the exchange rate to avoid a complete flight from the local currency – today, those who live in the neighboring country can buy a maximum of US$ 200 per month on the official market.

But, with so many options available, a new version, fully digital, has been gaining strength: stablecoins (stable cryptocurrencies), which allow citizens to circumvent the official block and obtain dollars without limits imposed by the government.

Stablecoins are cryptocurrencies that have parity with another asset, commonly a well-known national currency such as the dollar, euro or even the Brazilian real. The most well-known dollar stablecoins are Tether (USDC), USD Coin (USDC), Binance USD (BUSD) and DAI, which is the most popular in Argentina. They are traded on cryptocurrency exchanges.

According to a report by blockchain intelligence firm Chainalysis released last week, Argentina is the second country with the highest adoption of cryptocurrencies in Latin America, in a movement driven by the purchase of stablecoins pegged to the dollar, motivated by the search for asset protection against devaluation. of weight.


Unlike the common exchange, the Argentine government does not impose limits on the purchase of cryptocurrencies pegged to the US currency. Given the increased ease of access, the sale of dollar stablecoins accounted for a third of all low-volume cryptocurrency transactions in the neighboring country between July 2021 and June 2022, according to Chainalysis.

Why are Argentines embracing the digital dollar?

The numbers show that Argentines are adopting the digital dollar against the traditional exchange rate. But why choose this version? According to Henrique Teixeira, country manager of the Ripio crypto platform, founded in Argentina, the reasons are varied:

fully digital: One of them is the ease of not having to deal with large sums of physical money. “If you take US$ 2 thousand to exchange, the amount of Argentine pesos that remains is so large that you cannot carry it in your pocket or inside a wallet, you need a backpack”, explained the executive yesterday, in an interview yesterday with Cripto+ ( see the full text above).

Safety: For him, the option for stablecoins also avoids having problems with buying fake dollars on the parallel exchange. In addition, it is possible to transfer them between people without intermediation from the banking system (using cryptocurrency wallets), something that ends up attracting citizens who want to circumvent the blockade imposed by the government.

Easy to use: Using it is also as simple as swiping a card: many fintechs offer prepaid cards that can be loaded with cryptocurrencies, so you can add dollar stablecoins to your balance to make purchases at any establishment (the conversion is done on the spot of purchase).


Transparent exchange: According to Teixeira, the stablecoin market operates freely according to supply and demand, so the price of a USDT, USDC, BUSD or DAI digital dollar tends to be very close to the Argentine peso dollar quoted on the international market – that is, the price that appears when performing a Google search.

“There shouldn’t be big disparities because the market adjusts itself automatically, it works 24/7, unlike the traditional financial market, which ends up delivering a fairer price to the end user”, points out the specialist.

Remuneration: In addition, those who just want to keep the dollars to protect themselves from inflation have the option of depositing the assets in one of the remuneration accounts that pay interest on stablecoins available in the country.

Brazilian tourist can also use it?

The advantages of stablecoins are not restricted to Argentines, and they can also be used by Brazilians who wish to travel there – or indeed, to any other country. In the case of Brazilians, there are even extra benefits. Check out:

No IOF: the digital dollar is cheaper compared to the exchange house, among other reasons, due to the absence of charging the IOF (Tax on Financial Operations) on the purchase of cryptoassets, even if they have a price paired with the dollar.

“When we buy dollars, there is the IOF, the own exchange rate, the spread that we will pay to the intermediary. In the case of stablecoins, this is not the case, because we are buying directly from the source. So, for example, if the dollar price of the stablecoin is worth R$ 5.50, the investor will pay this amount directly”, explains Guilherme Bento, partner and cryptocurrency specialist at Acqua Vero Investimentos.

Mobile acquisition: even after travelling, it is possible to buy stablecoins through the exchange’s mobile app using Pix, and get the assets in the digital wallet or prepaid card. It is therefore not necessary to visit a currency exchange office.

Always shopping in Argentine pesos: although Argentine establishments accept dollars widely, the exchange rate is not always favorable and can fluctuate a lot. When using a card loaded with stablecoins, however, the purchase is settled directly in Argentine pesos, avoiding confusion when figuring out which quote was used.

However, there are also risks involved:


stablecoin guarantee: Exchanges that trade stablecoins do not guarantee that the assets purchased will actually be worth $1 each. According to experts, the recommendation is to research the reputation of the companies behind the project to assess the risks involved in keeping a large amount of money in that digital asset.

In May, an experimental stablecoin worth $1 went to zero within days of crashing. The aforementioned stablecoins, such as USDT, USDC, BUSD and DAI, however, operate in a format considered safer, with collateral deposited in a bank. Of these, USDC is the most heavily regulated by US authorities.

capital gain tax: although they are not subject to IOF, stablecoins need to be declared to the IRS. In the annual adjustment, they must be specified in the list of assets, according to the equivalent value in reais. However, you only need to pay capital gain tax if there is a profit on the sale (or conversion) of these assets above BRL 30,000 per month.

How to buy digital dollar in Brazil

To purchase these digital dollars, simply open a free account at one of the many brokerages operating in Brazil that sell dollar stablecoins such as USDT, USDC, BUSD and DAI, which allows you to withdraw this resource.

From there, just send a Pix with the desired value in reais to convert and make the purchase on the platform.

“And then you are hedged in dollars, or hedged in dollars, so that you can eventually make this trip to Argentina or any other country abroad without worrying about the volatility that the reais will have as you need to use this resource in the abroad”, reinforces Teixeira.

In parallel, it is also recommended that the traveler request a prepaid card loaded with cryptocurrencies to supply them with purchased stablecoins. When spending abroad, the user only needs to worry about whether the establishment accepts the brand of the card purchased.

Ripio and are companies that offer such cards in Brazil, both under the Visa brand.


Sign up and discover how to surf the Third Wave of Cryptocurrencies and understand why you should now look into this type of investment

Source link

About Admin

Check Also

These are the best games and apps of 2022, according to Google

Fortunately, once again there was the disclosure of the Googlelast Thursday (1), of a ranking …

Leave a Reply

Your email address will not be published. Required fields are marked *