Hoarding USDT: Argentina Turns to Stablecoins

A new report claims that Argentinians are increasingly hoarding USDT to safeguard the value of their savings and fight hyperinflation.

According to Forbes, Argentines are becoming increasingly crypto-savvy. However, the report claimed they 'aren't playing the meme coins lottery or trying to get rich off the next token on the cusp of taking off.' Instead, it claimed, they 'typically buy and hold USDT.'

The media outlet quoted Maximiliano Hinz, the head of Latin America operations at the crypto exchange Bitget, saying, 'Argentina is a strange market where many people buy USDT, and it doesn't go any further [than that]. '

We don't see this anywhere else. Argentines buy Tether in cash and leave it [in their wallets]. They don't do anything with it.' In other parts of the world, traders often use USDT to buy different coins, including Bitcoin (BTC).

However, experts agreed that Argentina-based 'don't typically use USDT to speculate by trading it or swapping it for other types of cryptocurrency.'

The government has previously set caps on foreign currency buying as hyperinflation continues to dog the Argentinian economy. As such, the media outlet wrote that USDT is the perfect escape from Argentina's inflationary woes to many.

But, it warned, USDT buying 'comes with its own set of risks,' as Buenos Aires still 'hasn't created any regulations to control this wild industry.' Stablecoins pegged to the United States dollar 'are consistent with the concept' of dollarization, the media outlet remarked. Bitcoin-keen President Javier Milei hopes to dollarize the Argentine economy and do away with the fiat peso.

But despite recent regulatory moves, Argentina still needs to provide significant regulations or safeguards for cryptocurrency users,' the report's author wrote.

Chainalysis data has shown that Argentina 'leads Latin America in gross crypto transaction volume,' with an 'estimated $85.4 billion processed through July 2023.' The media outlet noted that Argentines are also keen customers of some of the world's biggest crypto exchanges.

Per SimilarWeb data, 'out of 130 million visitors to 55 of the world's largest crypto platforms, 2.5 million came from Argentina.'

'Argentina is an anomalous market where many people buy USDT, and it doesn't go any further [than that].'

As hyperinflation continues to plague the country, hoarding USDT reflects a unique economic strategy. This approach underscores Argentina's broader challenges and highlights the critical role stablecoins play in providing its citizens with financial stability.