The victory of Javier Milei in the presidential elections in Argentina generated a significant increase in the quotation of crypto dollar, which experienced a rise of $160, reaching $1150.
This increase is attributed to speculation about the possible dollarization of the Argentine economy, a proposal highlighted by the president-elect during the campaign.
The rise of the crypto dollar generated expectations of pressure on parallel currencies for Tuesday’s exchange day, while on Monday, as it was a holiday, the expectation of devaluation was contained.
The price of the crypto dollar began to fluctuate after the closing of the polls, going from approximately $909 on Sunday morning to $990 at 7:30 pm when rumors of Milei’s victory gained strength.
After the acknowledgment of defeat by Sergio Massa at 8:10 pm, the quotation increased again, reaching $1150 in less than two hours.
This exchange rate is based on operations with stablecoins, cryptocurrencies linked to the US dollar with a 1-to-1 parity to minimize volatility.
This market operates 24 hours a day, every day of the year, and lacks exchange regulation.
The main quotations are made through digital wallets, highlighting Tether’s USDT, representing 80% of transactions in Latin America, and Circle’s USDC.
The recent increase makes the crypto dollar the highest exchange rate, although its value may vary between different assets and platforms.
Constant availability allows investors to speculate on the dollarization of their portfolios, anticipating movements according to electoral rumors.
Economists estimate that, based on the monetary base and peso deposits until November 2023, the dollarization program would not be viable with an official exchange rate below $3000.
An increased demand for parallel dollars is expected, which could boost their value. Despite certain relativizations since the primaries, Javier Milei confirmed in the last presidential debate that the dollarization plan is still underway.
What is a CBDC?
A Central Bank Digital Currency (CBDC) is a currency that has gained importance in the economies of different countries, which are analyzing whether it is viable to implement it in a banking system that is becoming increasingly digitized.
A CBDC is a digital, non-physical version of the banknotes and coins used every day. These depend on a central bank and are not equivalent to the well-known cryptocurrencies.
These digital currencies have the same value as physical ones, but with the aim of reducing the use of cash and digitizing banking operations. One of the benefits highlighted for CBDC is in the area of security, as transactions can be traced to reduce illicit transactions.