Abolishing the central bank, dollarising the economy, cutting government expenses equivalent to 15% of the gross domestic product, and privatising every public company that "can be in the hands of the private sector" are some of the most radical economic pledges that convinced 56% of the Argentinian electorate to elect the self-proclaimed "anarcho-capitalist" and former TV star host Javier Milei as their new president.
Financial markets regarded the Sunday victory of the right-wing candidate as favorable - the Argentinian stock exchange went up 20%, and shares in Argentinian companies in the U.S. exploded in value by 40%.
On the other hand, political and economic experts have come forward with several arguments to show that, with increasingly dire consequences for the living standards of the country's population, rather than bringing the country's economy out of its decaying state, Javier Milei's policies will push it to total collapse.
Whether it turns out to be a successful or failed political project, the election of the extreme right candidate will likely increase the use of cryptocurrencies.
To counter-balance the destabilizing persistent high inflation levels, reaching around 140% in the past month, and a decrease of 90% in the value of the national currency over the past four years, South America's 2nd largest economy has become one of the world's leading nations for crypto adoption, ranking 15 in the Chainalysis 2023 crypto adoption index.
Milei and other members of his party have shown support for crypto. Diana Mondino, the expected new minister of External Affairs, said that upon their party's victory, "Argentina will become a Bitcoin paradise."
Given this outspoken enthusiasm for decentralized currencies, Bitcoin pushed through the $37,000 threshold as the election results were announced. Mauricio Di Bartolomeo, co-founder of the Argentinian crypto company Ledn, believes that "Argentinians will be able to legally transact in bitcoin and stablecoins very soon.
This will boost adoption even more."
Ruslan Lienkha, from YouHodler, also agrees that Milei's presidency will enhance crypto use: "The use of crypto will be much broader in this country with time if Milei withstands the current grave economic problems and doesn't lose his position."
However, the monetary anarchist utopia envisioned by Libertad Avanza (Liberty Advances) might turn out to be impossible to implement, as Milei's party failed to win a parliamentary majority. Diego W. Pereira of JPMorgan sees that "President Elect Milei is offering a bold reform agenda ahead, but the main challenge is that it may be hindered by political maneuverability. Governability risks lay ahead given the lack of party structure, and also the power distribution in Congress after the general elections."
In the case that Milei's legal economic shock treatment takes time to unfold, the use of cryptocurrencies will likely increase anyway, as Argentinians will turn to crypto to avoid the repercussions of political polarization and civic unrest on their individual incomes.
Milei stated, "Bitcoin is the natural reaction to Central Banks' fraud." In times like this, when political turmoil threatens to worsen the economic conditions of the population, crypto stands as a natural reaction against all kinds of uncertainty deriving from central authority.
