Argentina dilemma between debt and the future of cryptocurrencies
Argentina has once again drawn interest from around the globe. The government appears to be heading for another crisis rather than reforms as a result of peso devaluation, inflation, bonds with exorbitant returns, and shitcoin controversies. Despite President Javier Milei’s pledge to “break the system” and pave the path for the future, Argentineans continue to perceive the same issues under a new façade.
That criticism has begun to grow is hardly surprising. In a social media post, economist and best-selling author of The Bitcoin Standard Saifedean Ammous referred to Milei’s policies as a “debt and inflation pyramid” and cautioned that the nation is becoming a “casino for speculators.”
Milei and his economic course
Javier Milei made a bold commitment when he took office: to close the central bank, control inflation, and rebuild Argentines’ faith in currency. No significant changes have occurred in nearly two years.
The peso is still losing value quickly; in the last several months alone, it has dropped more than 10% versus the US dollar and left the “corridor” that the government was attempting to protect. Additionally, the money supply is expanding; in June 2025, it surpassed 80.9 trillion pesos, up from 75 trillion in May. Stated differently, the government is producing money more quickly than it had promised.
The rate of inflation is still high. Argentines are already facing price hikes that consume any earnings or savings, despite the government’s projection that inflation will slow to 10% in 2026. While banks are compelled to purchase bonds due to new regulatory obligations, bonds are being sold at outrageous annual rates of 80–90%.In light of this, the controversy surrounding the LIBRA token, a memecoin that Milei advertised on social media,
Investors claimed losses of over $107 million as the token crashed after a brief surge. The majority of market participants lost their savings, although others were able to cash out. The president disassociated himself by asserting that he was not involved in the project’s design. But a commission was established by the Chamber of Deputies to look into it, and LIBRA came to represent how Milei’s experiments only served to erode trust in economic policy.
The “financial bicycle”
At the same time, the nation rides what is called the bicicleta financiera, or “financial bicycle.” The plan is straightforward: the state creates bonds with yields so high that they even surpass the devaluation of the peso. Dollar holders enter this market, purchase bonds, and feel like winners for a moment.
However, this bicycle only functions as long as the government continues to produce new currency and settle outstanding obligations. Everyone is aware that the chain will eventually come loose. Wealth will be saved by those who act quickly. The market will crash the rest.
Big players are skilled at this. J.P. Morgan recommended its clients to purchase Argentine bonds in the spring and to sell them by the summer. Insiders benefited from double-digit yearly profits as a result, but regular Argentines were left with empty wallets and a depreciated currency. This bike becomes a kind of Russian roulette for them: if you’re lucky, you’ll enjoy a better life for a few months; if not, your entire family will go hungry at night.
El Salvador and Venezuela: Two examples
State-led crypto trials are not new in Latin America. El Salvador was the first nation to venture into a true “Bitcoin experiment.” President Nayib Bukele declared Bitcoin to be legal tender in 2021. The world shook its head in skepticism: Bitcoin being added by a financially indebted, dollarized nation without its own monetary policy?
However, years went by with no disaster. Conversely, El Salvador mines some with geothermal power plants and has more than 6,000 Bitcoin (worth roughly $700 million as of September 2025). The nation has turned into a sort of cryptocurrency showroom, drawing investors and visitors who want to witness how a “economy with Bitcoin in your pocket” operates.
But there were some obstacles. The IMF pushed back right away, saying the country had to give up on the concept of “national Bitcoin” if it wanted further funds. The government made a concession; companies are now only required to accept Bitcoin voluntarily. According to surveys, around 50% of people use Bitcoin occasionally, primarily in grocery stores. Although it never took the place of the dollar in daily life, it helped El Salvador become known as a leader in innovation.
Venezuela adopted an alternative course. The Petro cryptocurrency, purportedly supported by oil reserves, was introduced by Nicolás Maduro’s government in 2018. The goal of the ambitious plan was to prevent hyperinflation and establish a “digital oil economy.” It was far worse in reality. Petro was not accepted on international exchanges, and almost no one used it. The populace soon realized:
The token was just one more tactic used by the administration to blame the people for the catastrophe. While Petro continues to represent failed experiments, Venezuelans continue to turn to P2P platforms and private coins for solace.
Two tales, two examples. El Salvador uses cryptocurrency to improve its reputation and draw in new investors. It was employed by Venezuela to adorn the wreckage of their economy. The question now becomes, where will Argentina fall on this spectrum? Is Milei in danger of becoming a new Maduro because of his “phantom crypto projects,” or can he replicate Bukele’s story?
Crypto as a safe haven
The Argentineans themselves have long figured out a way out while the authorities experiment. Stablecoins like USDT or USDC are a means of avoiding depreciation for them. In a nation where bank savings depreciate more quickly than they earn interest, Bitcoin serves as a store of value. Additionally, Solana has gained popularity recently due to its quick and affordable transactions. It is used for daily transfers and payments, and some investors view SOL as an alternative “store of value.”
Argentina is among the top 10 countries in the world for the number of cryptocurrency owners. Furthermore, this is a real “bottom-up crypto-economy,” in contrast to El Salvador’s or Venezuela’s state-run initiatives. It is created by citizens themselves, safeguarding their savings, thus political slogans are unnecessary.
In Argentina today, individuals turn to cryptocurrencies for solace as politicians engage in risky financial experiments. One universe revolves around the debt cycle, while the other one is centered around the blockchain. And this disparity demonstrates that the decisions about the future of our economy are being made in the pockets of regular citizens rather than in government offices.
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