News coming out from Binance Labs suggests that they are going to be involved in a new exchange in Argentina. These rumours began with online stories suggesting that Binance had entered into an agreement with the Argentine government.
Binance CEO Changpeng Zhao then sent out a tweet on the 9th of March stating, “Guess where we will have a new fiat-to-crypto exchange?” Since then, Binance posted an announcement on their site explaining why they believe that digital currencies are about to go mainstream in Argentina.
The post pointed out that the country’s Ministry of Production and Labour will give them a grant of up to US$50,000 on every new project they start, matching their own investment. So why did they choose Argentina and what can we expect from this project?
What Would the New Exchange Involve?
At the start of the year, it was reported that Binance would be launching eight new fiat-to-crypto currencies in different countries. The only names confirmed to be on this list were Malta and Singapore, so could Argentina be another one of them? It is certainly looking that way now.
It seems that the agreement has been made between the Argentine government and Binance Labs, which is the investment and social impact part of the exchange. This part of the company aims to work with others on blockchain projects around the world.
What coins will this exchange offer? Will it let users convert Pesos and US Dollars into the likes of Bitcoin (BTC) and Ethereum (ETH)? There have also been new cryptocoins launched in the country lately that could be included. For example, the Buenos coin is designed to improve financial inclusion in Argentina. Meanwhile, the Costaflores winery in Mendoza launched the world’s first wine-backed cryptocurrency in 2018.
Then there is the intriguing possibility of the new exchange offering some sort of government-backed crypto asset. To understand what the chances of success are, we need to look at the popularity of cryptocurrencies in this South American country.
The Popularity of Cryptocurrencies in Argentina
South American countries seem to consistently struggle with economy but have a vested interest in cryptocurrency at the same time. Image: Alexey Struyskiy/Shutterstock.com
Argentina is currently considered to be the Latin American country with the greatest potential for cryptocurrency growth. With a population of some 44 million people, it has traditionally been home to one of the region’s strongest economies.
Yet, Argentina is currently engulfed by a deep economic crisis. The Peso has shed a huge amount of value and inflation has been spiralling wildly out of control for several years. At 47% inflation in 2018, they were behind only Venezuela in their region. All of this has fed the public’s interest in digital assets.
People here can already use Bitcoin in a number of ways. They can withdraw it from ATMs, use it in shops, pay for their train journeys and go to Banco Masventas to send international transfers, similar to the way that Stellar Lumens (XLM) offer international transfers using the blockchain.
The Binance announcement on this link-up pointed out that, “Argentina is at the forefront of blockchain adoption”. There is no doubt that buying Bitcoin is seen as a way of protecting Argentines against more devaluation of the Peso.
What Does the Future Hold?
Continuing political uncertainty and a weak Peso mean that cryptocurrencies should continue to be appealing for Argentines. The timing for the launch of a new Binance exchange in the country could be perfect.
Featured image source: Millenius/Shutterstock.com