Argentinian president open to a central bank digital currency

President Fernandez says CBDCs are less prone to inflation

Crowds waving the Argentine flag                                 
The Argentinian president says he is open to the idea of a central bank digital currency Photo:Shutterstock
                                

The President of Argentina, Alberto Fernandez, has expressed an interest in a Central Bank Digital Currency (CBDC).

During an interview with local media outlet Caja Negra, Fernandez said: “I don’t want to go too far out on a limb, but there is no reason to say ‘no’. They say the advantage is that the inflationary effect is largely nullified.”

Inflation is a prominent issue in Argentina as this year the country’s consumer prices rose 3.2% in June, taking inflation above 50%.

Recognising bitcoin as legal tender

During the same interview, the president was asked about El Salvador accepting bitcoin as legal tender and if Argentina could possibly do the same.

Fernandez' response shows the president is still cautious about bitcoin, however. He commented: “There is caution because of how unfamiliar it is, and because it is hard to understand how this fortune materialises.

"Many people in the world have these concerns, and that is why the project, or the system, has not yet expanded more than it has. But it is something to consider."

CBDCs on the rise

Since 2020, the number of countries looking in to a CBDC has doubled, with 81 countries now actively exploring the notion of a CBDC, according to the Atlantic Council’s GeoEconomic Center CBDC tracker.

Out of the 81 countries, five have fully launched CBDCs, with the Bahamas being the first to do so. Of the remaining 76 countries, 33 are researching the idea, 15 are in development and 14 are at the pilot stage.

Josh Lipsky, director of the GeoEconomics Center and former senior adviser at the International Monetary Fund (IMF), said: “Before COVID-19, central bank digital currencies were largely a theoretical exercise.

"But with the need to distribute unprecedented monetary and fiscal stimulus around the world, combined with the rise of cryptocurrencies, central banks have quickly realised they cannot let the evolution of money pass them by.”

Further reading: Two-thirds of people would use a central bank digital currency

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