Argentina has joined the league of countries whose fiat currencies have spiraled out of control. The country’s smallest monetary unit, the Centavo, is now roughly equal to one satoshi.
Argentinian Redditor OneMoreJuan brought the plight of the Centavo to global attention, claiming that every fiat currency in the world was bleeding. It’s only last week that reports emerged that the Lebanese pound, the Lira was at par in value to bitcoin’s smallest unit. OneMoreJuan reported:
“I’m from Argentina, and the smallest unit of our currency has reached the value of 1 Satoshi (Sat). Every FIAT currency in history has failed. Buy Bitcoin.”
Made a Bad Situation Worse
The Centavo has been in circulation since 1854, and its current value reveals the level of Argentina’s monetary crisis ever. Currency conversion limits, taxes, fees, and regulations have made the official Argentina peso to the dollar inaccessible. Instead, Argentinians are opting for unofficial rates which stand at 119 ARS (Argentine pesos) to the dollar. Going by this calculation, the price of a bitcoin is about ARS 1,050,000, compared to at least ARS 650,000 at the official rate. This means that 0.01 ARS—one Centavo—is approximately one satoshi.
The economic situation in Argentina was already bad, considering the country had been facing a three-year recession. The coronavirus pandemic only made a bad situation worse. The Lebanese national currency slumped to become roughly equal to one satoshi after the pound shed off over 50% of its value last week.
More People Are Buying Bitcoin
The situation in these two countries has brought to the fore heated discussions about the position of cryptocurrencies in the face of rising inflation. For the Lebanese case, reports indicate an increase in bitcoin’s peer-to-peer trading due to the lack of Bitcoin ATMs. What makes the situation in Lebanon more bearable is the fact that a large percentage of them have dual nationalities. This has led to a significant increase in the number of civilians owning cryptocurrencies.
The Argentinian case isn’t too different either, seeing that the economy has been in throes since 2018. Argentinians are already following the Lebanese route is the recent Central Bank poll is anything to go by. The country is reeling from three years of recession, the downturn caused by covid-19 induced lockdowns. In a country where inflation is at 50%, more people are buying bitcoin as an alternative. Other currencies like the Vietnamese Dong have already fallen below the value of the satoshi.
