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Can Bitcoin Change Argentina’s Cash-Only Reputation?

By | [email protected] | May 4, 2018 1:50pm

Digital toppings (Photo via AntiDomingo)

It was 2011. Using Meetup, some guys decided to gather in a bar in Buenos Aires and discuss a new digital sensation. It was called Bitcoin, and it was supposed to change the way we handled money. Six of them finally showed up and started a tradition: every month over beers, they talked about what was happening with this new cryptocurrency.

They didn’t know back then that Bitcoin was going to grow the way it did. Now, they have a non-profit organization called Bitcoin Argentina and a building named Espacio Bitcoin (or Bitcoin Space), a co-working place where entrepreneurs that use blockchain-based technology can house their offices.

The creation of Bitcoin Argentina is just an example of how Buenos Aires developed a quick interest in this technology in recent years. Franco Amati, one of the organization’s members, believes that the country’s economic problems have always been a fertile soil for Bitcoin to grow. Cryptocurrency not only seems a very attractive option for investors, it’s also a simple way for people to do wire transfers.

Inflation was also one of the reasons, but there were simpler safeguard methods. What really fueled that interest was Argentina’s restriction on buying US dollars. From freelance designers that worked for other countries to parents that wanted to send money to their children in Spain, people started to see Bitcoin as a thing they could use to bypass the “cepo.”

Even when those restrictions ended, international wire transfers remain a tedious practice in this country. Sometimes, an authorization from the bank it is needed. Bitcoin appears as a simpler way if you know how to handle it. “We buy Bitcoin in the US and then we sell it here. That’s quicker than a transfer and cheaper, because we know how to do it,” Amati says.

Now Argentina has one of the largest Bitcoin communities in Latin America. “We are more globally oriented. Brazil has a big domestic market and startups there have a more local influence,” Amati explains. There is another difference: while Brazil has a more speculative approach to this cryptocurrency, Argentina has founded several uses for it.

One of the most attractive uses for bitcoins is the investment option it represents. Having it as an asset, bitcoin holders can enjoy earnings that perform much better than the Argentine peso. Amati relies on this cryptocurrency for that. “I find it normal, because I trust in the future of this technology, but I wouldn’t recommend it. The risk is still high,” he accepts.

Argentina’s startup environment is also interested in this technology, given the number of transactions involving bitcoin that take place on a regular basis in this country. Some of these emerging companies provide a way to access foreign stock and credit markets.

There are also startups that allow you to do wire transfers and you will never know that they’re using bitcoins. Of course, they charge you a fee for every transaction. This cryptocurrency is about to turn 10 years old and, to Amati, it has developed a strong position through the years. “It was like a toy, and now there are Bitcoin futures trading companies,” he highlights.

In spite of the enthusiasm, Bitcoin as a payment method it’s not a thing yet. “It’s logical. It’s hard to train employees in this technology. And why would you do it? There aren’t many customers willing to use it after all,” Amati says. In a sense, there is still a long way for Bitcoin to become an everyday option. But it can be used for online shopping. Amati uses it to buy plane tickets, for example.

Digital toppings (Photo via AntiDomingo)

Digital toppings (Photo via AntiDomingo)

According to Coinmap, Buenos Aires is the third-ranked city worldwide with the most stores that accept this cryptocurrency as payment. Bars, hostels, and coffee stores are just some of the 150 places listed. Although this might serve as a guide, it’s not exactly accurate. Lab, a coffee store located in Palermo Hollywood, is marked as one of the places that takes bitcoins, but they haven’t done so in a while.

However, there are a few anecdotes that picture an incipient map of Argentina’s crypto-life. Doble Seis, a bar in Palermo, was born from a loan in bitcoins. So of course, it accepts them gladly. AntiDomingo en Villa Urquiza is another place where you can use your bitcoins to get a drink and temporarily forget the depression of having to go back to your job next day.

“It all started as a test,” Daniel Alós, the owner of the bar, tells. He thought this technology was disruptive and started to investigate. Since 2013, his bar also serves more as a promoting place than an actual location to spend some bitcoins. “That is because people tend to use this currency for savings and not so much for shopping,” he believes. AntiDomingo even has an ATM where you can give your pesos in exchange for bitcoins. It was the first one  of its kind in Buenos Aires.

Last year, Odyssey Group said they hoped to start placing 200 bitcoin ATMs in Buenos Aires that are supposed to give and take Argentine pesos and provide cryptoassets. But for now, no further progress has been made.