Global: Argentine President Supports Provinces in Launching Local Currencies

In a significant development, President Javier Milei of Argentina has pledged not to obstruct provinces’ initiatives to introduce their own currencies. This assurance comes following a public exchange between President Milei and La Rioja province Governor Ricardo Quintela.

During a recent interview on Radio Mitre, President Milei stated that he would not legally impede the creation of local currencies by provincial authorities in Argentina. He expressed confidence that the market would ultimately determine the value of these projects. However, he cautioned against the potential pitfalls of “quasi-currencies,” predicting that they could lead to inflation and leave those who accept them vulnerable to scams.

President Milei warned, “Those who receive payments in quasi-currencies from irresponsible governors will clearly see a loss of their income. What is not taken from them through budgetary adjustment will be taken from them via inflation in the quasi-currency.”

Governor Quintela of La Rioja has proposed the creation of a separate currency for the province in response to President Milei’s decision to devalue the Argentine peso by 50% shortly after taking office on December 10, 2023. The devaluation aimed to address the country’s soaring inflation, which has reached its highest levels in 32 years. President Milei also reduced federal budget allocations to provinces.

Characterizing these measures as “the abandonment by the nation” and citing the need to pay salaries to policemen, Governor Quintela has requested La Rioja’s legislature to establish the legal foundation for minting the local currency. Notably, in December 2023, Axel Kicillof, the governor of Buenos Aires province, also publicly contemplated the possibility of introducing a local currency.

In a parallel development in Rosario, Argentina’s third most populated city, a unique agreement was reached between a local landlord and tenant. The agreement allows the rent to be paid in Bitcoin (BTC), marking the first such contract in Argentina. This milestone was facilitated by recent legal amendments under the new presidential administration.