Investors in Argentina bought two to three times as many stablecoins over the weekend compared to the average, according to the country’s crypto firms. This is following the departure of Argentina’s economic minister, Martin Guzmán, on Saturday amid an economic crisis.
The Argentine peso (ARS), whose purchasing power has fallen over the previous year as inflation has soared, is reportedly under threat of devaluation, according to three major cryptocurrency exchanges.
The peso lost value against the stablecoins DAI and tether after Guzman’s departure by roughly 15% on the platforms of many major local exchanges.
From ARS 245 on Friday to ARS 280 during the weekend, both stablecoins increased in value. Tether quotes on Argentine pesos have dropped after Silvina Batakis was appointed as the country’s new economics minister late on Sunday.
Inflation in Argentina rose by over 60% year after year
Guzmán’s departure is the latest repercussion of a dispute between Argentine President Alberto Fernandez and Vice President Cristina Fernández de Kirchner over the country’s economic course, which led to a 60 percent increase in inflation in May compared with the same month last year.
Additionally, the central bank of Argentina is running low on foreign exchange reserves, which has a negative impact on imports, among other things.
According to the corporation, “many people” used their DAI as collateral to secure loans in Argentine pesos and buy more DAI as insurance against a prospective peso depreciation. The Argentine exchange Buenbit reported a 300 percent spike in trade on Sunday compared to the same day in prior weeks.
According to many local media sources, the government might declare a foreign exchange break on Monday to soothe markets. Most Argentine exchanges boosted the margins between the bid and ask prices to 18%, while normally they are under 2 percent, as a result of the absence of price references for the U.S. dollar over the weekend.