Sergio Massa, a prominent candidate in Argentina’s upcoming election, proposed the adoption of a Central Bank Digital Currency (CBDC) to address the country’s persistent inflation challenges and strengthen its economic position on the global stage.
Massa suggested this move at his first presidential debate on October 1, 2023. during his speech, he emphasized that Argentina currently faces significant economic hurdles, including a staggering poverty rate of 40% and an annual inflation rate of 115%.
The presidential candidate ruled out the idea of the pro-Bitcoin candidate, Javier Millie, about adopting dollars in the country to tackle this problem and argued that introducing a CBDC could provide a solution by enabling individuals with assets abroad to freely trade and utilize their funds without additional taxes.
In his words:
“We are going to launch the digital currency in Argentina. We are going to do it globally for all of Argentina accompanied by a laundering law that allows those who have money abroad to bring it and use it freely without new taxes in parallel.“
However, this proposal has faced opposition from within Argentina’s crypto community. Manuel Ferrari, a board member of Argentina Bitcoin, believes this suggestion raises an eyebrow.
Ferrari expressed concerns about the CBDC’s design and the potential to use it for increased taxation. He argued that this approach could negatively impact Argentina, where more than 50% of commercial activities occur informally and involve cash transactions.
According to Ferrari, adopting CBDCs is essentially
“a government control mechanism.”
It’s worth noting that central banks in various countries have already begun developing or implementing CBDCs for diverse purposes. France, Singapore, and Switzerland recently concluded collaborative experiments exploring cross-border trading and settlement using CBDCs.
The Bank for International Settlements (BIS) Innovation Hub, in partnership with the Bank of Israel and the Hong Kong Monetary Authority, also recently released the results of their joint CBDC experiment, Project Sela. They claimed that the project demonstrated the feasibility of implementing CBDCs without compromising cybersecurity or user privacy.
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