Argentine President Javier Milei has indicated a laissez-faire stance towards the creation of local currencies by provincial governments, following a public discourse with Ricardo Quintela, the governor of La Rioja province.
In a Radio Mitre interview on January 14, Milei stated he wouldn’t legally challenge the establishment of provincial currencies in Argentina. He believes the market will ultimately determine their value. However, Milei cautioned that these “quasi-currencies” could lead to increased inflation and potentially deceive those who accept them as payment:
“Individuals accepting quasi-currencies from fiscally irresponsible governors will undoubtedly experience a reduction in their real income. What they don’t lose through budgetary adjustments will be eroded by inflation caused by these quasi-currencies.”
Governor Quintela of La Rioja is considering introducing a separate currency for his province. This move comes in the wake of President Milei’s decision to devalue the Argentine peso by 50% after assuming office on December 10, 2023, as part of his strategy to control the country’s highest inflation in 32 years. Additionally, Milei reduced the federal budget allocation to provinces. Citing the need to pay public sector salaries, including police, and describing these measures as national abandonment, Quintela has asked the La Rioja legislature to lay the groundwork for issuing a local currency. Similarly, in December 2023, Axel Kicillof, the governor of Buenos Aires province, also considered issuing a local currency.
In a related development, Rosario, Argentina’s third-largest city, witnessed a groundbreaking agreement where a landlord and tenant finalized a rental contract to be paid in Bitcoin (BTC). This contract, a first in Argentina, was enabled by recent legislative changes under President Milei’s administration.
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