Argentina Central Bank Running Out of US Dollars. Bitcoin as a Solution?

[BTCGalaxyA12]

Argentina ran out of US Dollars and started using customer deposits.
That's the breaking news that appeared an hour ago from the report of the Central Bank of Argentina which was delivered by the Twitter account @RadarHits.
This is due to inflation reaching 104%.

Shortly thereafter, Michael Saylor revealed that anyone not in Argentina would need Bitcoins.
Besides Saylor, there are several parties who say that the solution to this problem is Bitcoin as tweeted by Bitopia @BitopiaLand

Source:
https://twitter.com/RadarHits/status/1649786808811638784
https://twitter.com/saylor/status/1649874749294608391
https://twitter.com/BitopiaLand/status/1650048918720331778

[Call_Me_Guru]

The weakness of their local currency is the consequence of this and BTC is not the solution. BTC can not go round for the needed Argentine population and it can't be used to support their economy. The situation is can not be where the USD is only the currency they are short of, it goes with all the hard currencies.

The reason is that Argentina are importing more than exporting and they will forever depend on the USD if they can't change the situation.. The best solution is for the country to earn more foreign earnings, not bitcoin.

[DeathAngel]

Argentina are in big trouble, bitcoin would be the perfect solution but I just don't see their elected officials being open minded enough to adopt bitcoin as their official currency.

Unemployment is high in Argentina, it’s a population that needs a serious economic recovery. I just don’t see how they can recover without something like bitcoin. Less rich countries will be forced into bitcoin eventually, look at El Salvador, they are thriving.

[stompix]

First, Twitter rumors are not a source!

Second, if they ran out of US Dollars it would be because they can't afford dollars anymore as their currency is useless.
So, how in the name of god would they be able to buy Bitcoin when they can't buy $? Magic?

What Argentina is experiencing is the classical Weimar inflation problem  and not Bitcoin, not gold, not the euro, yuan, platinum, or any other thing that would help them since their problem is that they can't afford it in the first place. If they would have the money to buy 1000 BTC they would have the money to buy any hard currency!

[kryptqnick]

I don't think there are credible sources about running out of dollars yet. At least, not from what I've seen in the media. The part about inflation is true and terrible, and considering how badly their local currency has been doing for a long time, it might be a good time to start abandoning it and yes, even Bitcoin isn't as volatile and doesn't normally lose so much value, so at least adopting it as an additional legal tender could be helpful. At least it's a currency they can't break with troublesome monetary policies because it's out of their control, and it's not foreign fiat, making a country more dependent on a particular nation. But I do agree with others that it's not going to fix the whole problem, though.

[Hispo]

First, Twitter rumors are not a source!

Second, if they ran out of US Dollars it would be because they can't afford dollars anymore as their currency is useless.
So, how in the name of god would they be able to buy Bitcoin when they can't buy $? Magic?

What Argentina is experiencing is the classical Weimar inflation problem  and not Bitcoin, not gold, not the euro, yuan, platinum, or any other thing that would help them since their problem is that they can't afford it in the first place. If they would have the money to buy 1000 BTC they would have the money to buy any hard currency!

Right. Bitcoin is supposed to be used as a tool to transmit value and wealth, it is more difficult to create it with it (through mining or speculation)

I have friends in Argentina and in my humble opinion, what they need to do is to renegotiate their national debt and try to enhance production make people to work and pay their taxes, so they all can contribute to the future of Argentina.

It is not a bad idea if Argentina decided to diversify their assets using Bitcoin, but before adoption a reliable source of income is a necessity to get rid of deficits, it is crucial for the development of the economy.

[dimonstration]

It is not a bad idea if Argentina decided to diversify their assets using Bitcoin, but before adoption a reliable source of income to get rid of deficits are crucial for the development of the economy.

Diversifying their assets on a volatility asset while they are currently suffering on inflation will exposed them to more risk for collapsing their economy. This is not the good time for them diversify since they are already on the shitty situation. They should do this many years ago before inflation hits them hard. They should solved already the inflation problem if the are on Bitcoin even before 2017 since the price grows a lot by that time.

[Hispo]

It is not a bad idea if Argentina decided to diversify their assets using Bitcoin, but before adoption a reliable source of income to get rid of deficits are crucial for the development of the economy.

Diversifying their assets on a volatility asset while they are currently suffering on inflation will exposed them to more risk for collapsing their economy. This is not the good time for them diversify since they are already on the shitty situation. They should do this many years ago before inflation hits them hard. They should solved already the inflation problem if the are on Bitcoin even before 2017 since the price grows a lot by that time.

The thing is that having some Bitcoin in the treasury is better than only having their national currency. Why? Because in the case of the Venezuelan Bolivar or the Argentinian Peso, the value of the holdings can only go down with time, at least with Bitcoin they can get some sense of security in the long term.

But I agree that before holding a significant amount of Bitcoin, they first need to slow down their inflation. There is a good reason Bitcoin and altcoins have found adoption among the people of Argentina, it would be great if the people in the Pink House followed those steps.

It would only take their leaders to stop behind afraid of this sort of assets.

[so98nn]

Every country has reserve bank of nation. I highly doubt that they have ran out of USD. They might have depleted the treasury but there is always planning committee who’d decide whether the reserve needs to be replenished, usage needs to be stopped etc. If this is not rumour then I’m sure they have the worst government managing the funds like that.

They only have one solution if they have gone so far, that’s taking the federal loan and replenishing the dollar reserve. Or else they could go for homely way out and that’s stopping the import of material and boosting their export material.

In particular, imports would eat up their dollars while export would gain them more. Using national grown food, national manufactured products would be healthy in this case as it will stop the import requirement. This can reduce the dollar burden for sure.

However, bitcoin isn’t the solution for sure. Not at this moment.

[dothebeats]

That means they are in dire trouble. They either need to get more of this resource or they sell some if what they already have in order to refill their stash. USD, as much as a lot of people hate it, is still a very strong currency that a lot of countries bank on. Argentina is in a very precarious spot because of its bouts of hyperinflation, and without USD reserves, it will even be harder for them to transact with the outside world.

It is unfair that they are using their people's USD deposits to fill up their reserves. It isn't fair, and they should take other actions apart from this because this calls for a messy unrest for sure.

[adaseb]

Obviously it would of been better for all the residents of Argentina to buy bitcoin or pretty much anything else since their currency is undergoing hyperinflation. I think their error was cutting rates during covid.

Their inflation peaked in 2019 when they hiked agressively. Then when it started to go down and covid happened they decided to cut the rates. The rate was still like 40% or so however it was down from the 90% peak and it made a difference, now their inflation is higher than ever and undergoing hyperinflation. This is why keeping funds rates low is never a good idea.

[STT]

They have a fixed exchange rate I suppose or fake artificial politically forced market which will struggle because its not true, not a one off as it happens in alot of countries.  On the black market you will get dollar exchanged for their currency but at a different dynamic rate set by actual buyers and sellers who decide what they want.  Thats how capitalism works, the power is with the holders of the currency hence why any country where a central body is deciding for the many its not really capitalism in action; including when it fails but tell that to millions who blame the wrong things for failure.

After WWII quite a few countries had capital controls I think which is where you dont allow people to use their own money freely.  I think China is still doing this now yet its not in a war or recovering from one but it is injured from the burden of their dictatorship, so the people must pay.  Argentina needs more freedom, people are always the true source of growth and wealth in a country.

[Fiatless]

Argentina ran out of US Dollars and started using customer deposits.
That's the breaking news that appeared an hour ago from the report of the Central Bank of Argentina which was delivered by the Twitter account @RadarHits.
This is due to inflation reaching 104%.

If the problem is inflation, bitcoin will have little or no positive impact, except for those that want to use it as a hedge against inflation. This is because they still need the Peso to buy Bitcoin and the currency is losing its value. The dollar is not scarce but due to inflation, Argentina's Central Bank doesn't have enough money to buy from the international market. The only solution to the problem is to boast production, attract foreign investment, and improve export. This will make them earn more dollars before they can decide to either keep their reserve in dollars or Bitcoin. Since Argentina needs more investment, it will also be a good idea if they make policies that will attract investors from the Bitcoin industry.

[P2PECS]

The solution to the problem is for the Argentine government to stop spending beyond its means and to stop populist policies, but that is not going to happen, and certainly not overnight.

The best solution to high inflation would be to nip it in the bud, avoiding what is causing it, and not try to put out the fires with dollars while continuing to ignite them.