Take you into the cryptocurrency ecology – Argentina

On August 11, the Argentine government released the inflation rate data for July, and as a result, the indicator reached an astonishing 7.4%, the highest peak in nearly 20 years. At the same time, the cryptocurrency ecological crisis is also sweeping the world. However, nothing can stop the pace of market innovation. On the same day, the Ethereum conference “ETHLatam” held in Buenos Aires, the capital of Argentina, attracted more than 4,000 active participants. It is reported that the ETHLatam conference will be held in nine Latin America, the event in Argentina is the first of them, and the last event will be held in Panama on October 28.

In the opening keynote speech of the conference, Aya Miyaguchi, executive director of the Ethereum Foundation, pointed out that Buenos Aires has one of the strongest Ethereum communities in the world,

The city’s hackathons and various crypto meetups have attracted a large number of crypto enthusiasts who have now formed a great community.

In fact, the significance of the ETHLatam conference is extraordinary, and Argentina is the first country to host an international crypto event since the crypto boom began in the South American country in 2019. Since then, the local area has gradually attracted millions of new users in the encryption field, becoming one of the top ten countries with the highest encryption technology adoption rates in the world. Excitingly, the Mayor of Buenos Aires, Horacio Rodriguez Larreta, who has confirmed his candidacy for next year’s Argentine presidency, also attended the conference. In April, Horacio Rodriguez Larreta announced that the city’s residents would be able to pay taxes in cryptocurrencies, saying that the financial system has been tested for the integration of encryption technology.

It is worth mentioning that on the opening day of the conference, Diego Fernández, Minister of Innovation and Digital Transformation of Buenos Aires, also announced plans to deploy Ethereum validators in 2023, saying that the work “has exploratory and regulatory purposes” , which will help the city of 3 million develop an “adaptive regulatory policy” for cryptocurrencies. Once the plan is completed, Buenos Aires will be one of the first cities in the world to deploy an Ethereum node. In addition, the city plans to launch TangoID, a blockchain-based digital identity platform that will go live in January 2023, with the aim of giving city residents control of their personal data through the platform.

On Saturday, Ethereum co-founder Vitalik Buterin explained the Ethereum “merger” plan in Spanish in a video interview, and he also touched on other topics such as the LUNA ecosystem and the arrest of Tornado Cash developers in Amsterdam Wait. You know, Vitalik Buterin’s attempt to speak Spanish didn’t come on a whim, but stemmed from his close relationship with Argentina. In December 2021, Vitalik Buterin traveled to Argentina to meet with many local celebrities, and even visited Buenos Aires with Bitcoin evangelist Jerónimo Ferrer (Jerónimo Ferrer has detailed how cryptocurrencies are gaining traction in Argentina). rapid rise against the backdrop of inflation).

Another crisis, but with cryptocurrencies
Since mid-2019, a financial crisis has befallen Argentina, which has led to a rapid surge in inflation and a sharp currency devaluation. The Argentine peso has risen from 40:1 in August 2019 to the US dollar in July this year. 350:1.

For Argentina, the trauma of the experience is far more than that. The “Corralito” policy launched by the government in 2001 has left many people with lingering fears. At that time, in order to prevent bank runs and bankruptcy, the Argentine government froze depositors’ deposits and limited each resident. The outrage of the population was heightened by the limit of 1,500 Argentine pesos monthly withdrawals from personal checking accounts. Twenty years later, Argentina’s younger generation doesn’t want to repeat the mistakes of their parents, let alone suffer from politicians’ dereliction of duty, so it’s no surprise that cryptocurrencies are growing in popularity in the country.

At present, the Argentine government implements foreign exchange control. The amount of foreign exchange purchased by locals in commercial banks cannot exceed $200 per month, but there are no restrictions on the purchase of foreign currency from securities brokers and the purchase of stablecoins on cryptocurrency exchanges.

On the other hand, cryptocurrencies have outperformed traditional Argentine stock markets. According to data provided by the Argentine Stock Exchange (Caja de Valores), as of the first quarter of 2022, Argentines opened a total of 575,000 accounts with brokerage firms, while the local cryptocurrency exchange Lemon alone has more than 1.3 million. user.

The number of debit cards issued by several local exchanges such as Lemon, Buenbit and Belo has skyrocketed in the past year and a half due to the user-friendly nature of cryptocurrency transactions and sometimes even the return of crypto cash. It also reflects from the side that the Argentine cryptocurrency market is booming, and Binance, the world’s largest cryptocurrency exchange, will naturally not let this market go. In early August this year, it announced that it will cooperate with MasterCard to launch Binance Card in Argentina. , an everyday shopping app designed to boost cryptocurrency.

Today, cryptocurrency yields have doubled compared to traditional financial markets, which has led many users to turn to dollar-pegged stablecoins such as DAI or USDC to make money. Argentines have learned to use cryptocurrencies on Friday afternoons or weekends when traditional financial markets are closed to hedge against possible policy-induced devaluation of traditional currencies. In July, shortly after the resignation of Argentina’s economy minister Martin Guzmán due to the economic crisis, Argentines began buying stablecoins in bulk, two to three times as much as they would on a typical weekend, because when the stock market reopened, Argentines would not have to bear the risk of the Argentine peso. risk of devaluation.

Not only that, but there are now many young people participating in the Argentine cryptocurrency ecosystem by working abroad to earn dollars, euros or cryptocurrencies to ensure their income is decoupled from the peso.

first generation entrepreneurs
The ETHLatam conference attracted the first generation of Argentine cryptocurrency entrepreneurs who have become global players in their fields, such as Decentraland, a metaverse built on the Ethereum blockchain, and Decentralized Finance (DeFi) audit firm OpenZepellin, and Bitcoin (BTC) wallet startup Muun, all three started out in the Casa Voltaire building near Palermo in Buenos Aires, which attracted a lot of cryptocurrency development from 2014 to 2016 personnel settle in.

Now, the second wave of crypto startups is emerging in Argentina, and many promising crypto projects are beginning to emerge. For example, Argentinian entrepreneur Patricio Worthalter spoke at this ETHLatam conference about the Proof of Attendance Protocol “POAP”, which can provide people with a unique NFT to commemorate and prove that they have attended an event (both virtual or physical). ).

The Argentine-developed Exactly protocol also announced the launch of a testnet at this ETHLatam conference. Exactly is a decentralized, non-custodial, open-source protocol that provides an autonomous interest rate market for lenders and borrowers, said Gabriel, co-founder and CEO of the protocol. Gruber said that the Exactly protocol can flexibly set interest rates based on credit supply and demand. For the first time, users can exchange assets at variable and fixed interest rates without friction, and then better grasp the time value in DeFi.

Another Argentine Web3 entrepreneur, Juani Gallo, shared at the ETHLatam conference that FundIt, an encrypted crowdfunding project created in cooperation with local enterprise-level Damian Catanzaro, has reached 1 million users of Cafecito, a tipping platform project previously launched by Cantanzaro, which is similar to Bitcoin. Layer 2 Lightning Network integration on top of the blockchain greatly increases transaction speed.

Manuel Beaudroit, CEO of local Argentine cryptocurrency exchange Belo, said that in Asian and U.S. markets, most developers build technology to improve trading and investment systems, while in Latin American countries, crypto developers typically use crypto to solve problems. Some specific day-to-day problems. Manuel Beaudroit concluded:

In Argentina and Latin America, we need to address a lot of issues like inflation, remittances, value protection and savings in general, and that’s exactly what the crypto ecosystem is trying to solve, so you’ll see more and more crypto apps being used into this ecosystem.