Argentina’s new government has officially legalized the use of Bitcoin and other cryptocurrencies for contract settlements and payments under a new economic decree.

Diana Mondino, the country’s Minister of Foreign Affairs, International Trade and Worship, announced the development on social media on Dec. 21.

Mondino said:

“We ratify and confirm that in Argentina contracts can be agreed in Bitcoin.”

She continued:

“And also any other crypto and/or kind such as kilos of beef or liters of milk… Art 766. – Obligation of the debtor. The debtor must deliver the corresponding amount of the designated currency, whether the currency is legal tender in the Republic or not.”

This development comes amidst Argentina’s ongoing battle with hyperinflation and a weakened economy. The country’s new administration, led by President Javier Milei, has been exploring innovative ways to stabilize the economy and provide alternative financial solutions to its citizens.

By integrating cryptocurrencies into its financial system, Argentina not only offers its residents more financial options but also potentially positions itself as a pioneer in the adoption of digital assets in Latin America.

Legalizing Bitcoin

The Argentine government has ratified a new decree as part of a broader economic reform and deregulation initiative.

The decree does not explicitly name cryptocurrencies but includes provisions that give individuals and businesses the freedom to choose their preferred mode of payment, even if it’s not recognized as legal tender in Argentina.

The move legally validates the use of Bitcoin and similar digital currencies in commercial transactions and contract settlements.

The decision to legalize cryptocurrencies is seen as a strategic response to the economic challenges that have long plagued the country. It opens up new avenues for financial transactions and investments, especially when digital currencies are gaining global prominence.

However, the move also presents regulatory and operational challenges that the government will need to address, including issues related to transaction security and market stability.

IMF guidance

With the new decree, Milei has officially taken a favorable position toward using cryptocurrencies in the country and has gone against the guidance issued by the IMF as part of its loan to the country.

The watchdog had urged the country to clamp down on the use of crypto among the local populace in addition to devaluing the peso.

Earlier this month, the country followed through and devalued its currency weeks after Milei took office, causing some to doubt whether the new President would continue to support cryptocurrencies.

However, it seems that Milei remains a proponent of Bitcoin, and his government will allow citizens and businesses complete freedom in choosing their payment methods.

It is unclear whether the government intends to develop a regulatory framework for crypto or issue new rules for the industry.

The international community is closely watching Argentina’s adoption of cryptocurrency. This move could influence other nations — especially those grappling with economic instability — to consider cryptocurrencies as a viable financial tool.

The long-term impact of this decision on Argentina’s economy and the global financial landscape remains to be seen. Still, it undoubtedly marks a significant step in the evolution of digital currencies.