How Argentina's Inflation Is Boosting Crypto Adoption and New Ways To Spend

For anyone tracking the shift of crypto from a speculative asset to one with a real-world use case, Argentina is one of the hottest test cases on the planet.

Even as Argentina's world-leading inflation rate eases, Argentines are still eager to hold something other than pesos as their currency continues to tumble against others, like the dollar. There's just one problem: with strict currency controls, it's not so easy to convert money into other options.

Over the last decade, as the Argentinian peso has lost 99% of its value versus the dollar, locals have been helpless. For those looking to avoid further losses, crypto has quickly emerged as the solution.

Despite being a much smaller economy than Brazil and Mexico, Argentina has actually seen more money converted into crypto, according to a recent report from Chainalysis. For people in Argentina, crypto is no longer just a novelty; it’s increasingly seen as a way to store and protect savings in a country where banks can’t deliver on the stability Argentines crave.

The problem, though, is that while crypto might help safeguard money in the short term, it’s only practical if people can spend it, too. At the Avalanche Summit in Buenos Aires, I had the chance to meet the Blockpay team, a Mexican fintech startup that's one of many building crypto-backed payment solutions that hope to make cross-border payments and remittances easier. They developed a way for users to deposit crypto onto a Mastercard that works like any other, except it’s loaded with crypto that converts to the local currency at the time of purchase.

I decided to put it to the test myself, starting with a small $10 balance to grab a coffee at a local café in Buenos Aires. While the first swipe failed due to a simple mistake — forgetting that the card required a PIN since it operates as a debit rather than a credit card — it actually worked quite seamlessly by the time the Blockpay team reminded me.

The potential of a crypto card that’s usable worldwide — especially in a country like Argentina where access to foreign currency is tightly restricted — can’t be understated. While Americans might take the dollar’s stability and a seamless financial system for granted, citizens elsewhere are for the first time being offered access to dollars and financial stability they were once blocked from. While fees might be in-line with what banks charge for currency swaps, or while some apps might not offer the best exchange rates, it's easy to see where those come down as the size of the market grows. (At the very least, that has been the trend in DeFi.)

Even Circle's CEO Jeremy Allaire recently jumped at my idea to have a USDC cash out option for drivers in Uber (and tagged Uber's CEO Dara Khosrowshahi.) For drivers who send their earnings back home via remittance payments to family members, a payment option like the one Blockpay's developing could finally help non-crypto users in foreign countries without access to banking options or blocked international currencies.

The adoption is real and growing. As companies like Blockpay and others continue working on making crypto spending as convenient as a typical card transaction, this digital currency shift could be Argentina's way of reclaiming financial control in a turbulent economy.

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