🌎 The reality of crypto in Argentina

We show you the reality of the country

AuthorAuthorAuthor

Frontera EC, Abraham Rivv & Abraham Cobos
December 06, 2024

Frontera subs last edition: 62

Frontera subs this edition: 87

This week we grew 25 subscribers, a 40% weekly increase 🔥. Share this post to help us keep growing. 

Frontera is the newsletter that keeps you updated on what’s happening in crypto in LATAM, just the reality of how the industry is evolving in our region. 

If you want to build products, invest, or grow in LATAM, this is your place. 

You can complement this newsletter by listening today's episode of the Frontera podcast where Ab and Cush delve into the most important things of this week.

🇦🇷 The state of crypto in Argentina

This week I was talking with some people from SEED and thanks to Candu I found an interesting report about the state of crypto in Argentina.

The economy in Argentina is changing drastically thanks to Milei 

Argentina is undergoing a historic transformation under the leadership of Javier Milei, who is implementing radical reforms to address the country’s deepest economic and social crisis.Everything Milei has done, is doing, and plans to do is based on the principle of non-aggression and the defense of the right to life, liberty, and property. All of this is based on Libertarian economic ideas, a strong free market and a small government

Upon taking office, Milei inherited a devastated economy with 1% real daily inflation (17,000% annually), poverty affecting 50% of the population, and a fiscal deficit of 15% of GDP. To avoid a chaotic hyperinflation, he prioritized fiscal balance and reduced public spending. In his first month, he reduced ministries from 18 to 8, dismissed 50,000 public employees, and achieved a fiscal surplus for the first time in 16 years. He also established a deregulation department that eliminates between 1 and 5 regulations daily…This looks like a trailblazer for DOGE. 

These measures not only halted hyperinflation but also returned resources to the private sector, laying the foundation for sustained growth. Monthly wholesale inflation dropped from 54% to 2%, and poverty decreased by 11 percentage points.

Today, 3,200 additional reforms remain on the agenda, with projections indicating that by 2025, Argentina could grow by 5% to 6%, little by little positioning itself as “the freest country in the world”. Argentina seemed to be doomed economically, today Argentinians see potential economic growth for the first time in 12 years.

How does this benefit crypto?

During Milei's presidency we’ve got significant regulatory progress regarding crypto: 

  • National Blockchain Committee (2022): Government established a committee to shape cryptocurrency regulation. (Before Milei, but is important too, because it is preserved)

  • Proposed Tax Reforms (February 2024): New legislation to remove tax burdens on crypto holdings, focusing on capital gains.

  • VASP (Virtual Asset Service Provider) Registry (March 2024): Mandatory registration for crypto exchanges and service providers for AML/CFT compliance.

  • Tax Amnesty Including Crypto (June 2024): Law passed to regularize undeclared crypto assets.

  • Tokenization of Goods (July 2024): Legal updates enabling blockchain-based commodity financing.

  • Corporate Capital Contributions (July 2024): Shareholders authorized to contribute capital using virtual assets.

As we mentioned in the Frontera report, it is no coincidence that part of the regulations that have been implemented address crypto. Milei knows the potential of this technology to solve many of the problems that the Argentine population currently has and also the philosophy of the crypto industry is 100% associated with the Libertarian philosophy that governs Milei

If you are a protocol you are interested in Argentina

Argentina’s crypto market is flourishing despite its small population of 46.8 million, with $91 billion USD in crypto inflows between July 2023 and June 2024. To wrap your head around this number, think that $91 billion USD is 33% greater than the largest remittance corridor in the world (USA-MX). 

Driven by financial instability and inflation, Argentina has become a leading hub for crypto adoption, outpacing Brazil and Mexico in trading volumes. In early 2023, trading volumes grew fivefold, with USDT/ARS as the top pair. 

Argentina’s strong crypto presence is evident with 4.63% of Binance’s global users being Argentinian and estimates show that between 9.7% and 20% of Argentinians hold crypto. This is the greatest crypto penetration in LATAM.

Argentina also has a large technological ecosystem combining the factors of positive regulation, a big developer pool, and a hungry set of founders willing to go through the pain of building something new. Argentinians are culturally passionate people, they are big fighters and resourceful executioners. The combination of the talent pool and the culture makes Argentina an exciting place for crypto. 

There are more than 115,000 developers, making it a privileged place for profitable outsourcing.The country’s success in crypto adoption is fueled by the government’s support for blockchain innovations, including Buenos Aires' ZK-backed digital identities for citizens. Also there are notable global projects with Argentine founders (You can find more in our report):

Another thing you should have on your radar is Crecimiento, the popup city based out of Argentina. Crecimiento is positioning the country as a global crypto hub through a blend of grassroots innovation and institutional support. Here are some key milestones they achieved: 

  • Regulatory sandbox development, with tokenization legislation pending in Parliament (Q1 2024).

  • Collaboration with Buenos Aires government, CNV, and CAFCI.

  • Innovation hub and year-round programs like accelerators and hackathons.

  • Target: 10 million on-chain users and a 10x boost in the startup ecosystem.

This proactive framework, paired with tax incentives and strong legal support, fosters a founder-friendly DeFi environment.

To finish...

Argentina is a clear example of what can happen when capable leadership is lacking. With the arrival of Milei, we have seen positive changes in just one year, changes that other politicians considered impossible.

This shows LATAM a valuable lesson: we must choose our leaders wisely.

A good choice of leaders combined with a technology like crypto, which solves many economic problems, is the perfect combination for Argentina. In my opinion, the market will evolve to the point where the majority of the country’s population will use crypto in their daily lives. Who knows? They might even adopt some cryptocurrencies as legal tender, as El Salvador did.

Despite the significant progress made with crypto and Milei's arrival, there is still much to do and many opportunities to explore. Far from being over, Argentina's journey toward becoming "the freest country in the world" is just beginning.

With 💜 Rivv & Ab

📰 Latam Crypto News 📰

This edition is presented by Bando

🚀 Unlock seamless Web3 spending with Bando: The On-chain Spending Protocol!

Easily integrate our fully customizable widget in minutes to enable your dApp, Wallet, or AI Agent to offer users the ability to spend tokens on gift cards, airtime, bills, in-game items, and more. 

Ready to bring this game-changing solution to your platform? 

Key stories of crypto in LATAM this week

Latam fintech funding in 2024 has surpassed last year's total, showing a 73% increase. Venture capital momentum is returning after a hard 2023, with more deals and growth opportunities.

Key data:

  • $2.6 billion invested in 174 deals in 2024, up 73% from 2023 ($1.5B).

  • Notable deals: Conta Simples ($41.5M), Félix Pago ($15.5M), Magie ($4M).

  • The momentum is driven by companies hitting milestones and new infrastructure-focused startups.

  • Latam still lacks large exits; Nubank IPO remains the biggest in 2021.

  • Funding comes predominantly from local funds, this is a BIG opportunity for global funds.  

The cross-border payments sector in Latam is rapidly evolving, driven by globalization and digital transformation, presenting new opportunities for operators, customers, and investors.

Key data:

  • Latam represents 17% of global remittances, with $156B in 2023

  • B2B cross-border payments in Latam could generate $25-$133B, growing at 11% Compound Annual Growth Rate (CAGR).

  • Brazil's Pix system revolutionized payments, with 5B transactions monthly.

  • ISO20022 standard to streamline cross-border payments by 2025.

  • Crypto promises cost-effective and secure cross-border payments.

Payment trends in Latin America are rapidly evolving, with digital wallets, neobanks, and instant payments shaping the future of commerce across Brazil, Mexico, Argentina, and Colombia.

  • 🇧🇷 Brazil: 82% of Brazilians have bank accounts, driving the growth of Pix, digital wallets, and cards. Pix surpassed credit and debit card transactions in 2023.

  • 🇲🇽 Mexico: There are 35 million Mexican adults (38%) without a bank account but with a mobile phone, but growing adoption of digital payments. 15% of the population uses neobanks. Credit (38%) and debit (25%) cards dominate ecommerce payments.

  • 🇦🇷 Argentina: Ecommerce payments are dominated by credit cards (54%) and digital wallets (23%). Mercado Pago’s market share may decrease due to new regulations.

  • 🇨🇴 Colombia: 32% of ecommerce payments are through bank transfers, mainly via PSE (Pagos Seguros en Línea). Digital wallet adoption is rising, with 61% of people using at least one.

🇧🇷 Brazil 

The Central Bank aims to align crypto with traditional financial rules, addressing investor risks. 

 A move like this poses a major risk to financial sovereignty.

If such a proposal were introduced in the USA, it would spark a massive debate, given the emphasis on individual rights and privacy.

Public consultation of this proposal ends Feb 28, 2025.

Drex = Brazilian CBDC project

The Central Bank hosted the 5th Drex Forum during G20 TechSprint 2024, focusing on governance and integrating digital assets with traditional markets. Phase 2 proposals closed on November 29. 

🇲🇽 Mexico

🎄 Espacio Cripto is organizing a Christmas posada in collaboration with Starknet in Monterrey city.

🇦🇷 Argentina

The tax agency added Bitcoin mining and exchange services to its economic activity catalog, improving oversight without changing tax obligations for crypto investments.

The accelerator program offers $250K to Web3 startups. Apply by Dec 20; early review for apps by Dec 5. Program begins Jan 13, 2025, in Buenos Aires.

Join the Aleph de Verano pop-up city in Buenos Aires (Dec 9-20), bringing together 300+ global builders & founders. Enjoy exclusive talks, a ZK bootcamp, hackathon, and networking events!

🇧🇴 Bolivia

In just 4 months, cryptocurrency transactions in Bolivia have grown by 112%, reaching $75 million. Over 252,000 Bolivians now use crypto for transactions.

🇨🇴 Colombia

Users can securely link NFC-enabled passports to World ID, earning up to 77 WLD tokens. The feature ensures privacy while verifying identity anonymously.

Want to share news or request a topic?, send them to frontera@espaciocripto.io