Digital coins lure inflation-weary Argentines and Turks
Can inherently volatile cryptocurrencies become safe-havens? Apparently they can in some parts of the world, such as Argentina and Turkey, where soaring prices and tumbling local currencies have forced people to seek refuge in digital coins.
Ownership of digital currencies in Turkey was the highest in the world at 27.1% followed by Argentina at 23.5% — well above global crypto ownership rate estimated at 11.9% — according to data from research firm GWI.
What’s common to Turkey and Argentina besides their pole positions in crypto adoption is high inflation, which has led to crumbling currencies and capital controls to deter local residents from taking money out. Turkey’s annual inflation was 50.51% in March, Argentina’s was even higher at 104%.
The lira and peso have been plunging and are at record lows. Argentina’s peso trades around 464 per dollar in the black market , more than double the official exchange rate of 222.
Much of the safe-haven buying has been of stablecoins such as USD Coin (USDC) and Tether (USDT), which are crypto tokens pegged one-to-one to a traditional asset such as the U.S. dollar or gold, giving investors an alternative to scarce dollars.
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