I'm Stacy Marie Ishmael, Managing editor of Crypto for Bloomberg News, and this is Bloomberg Crypto, a daily Bloomberg IHOT podcast. It's Monday, March thirteenth. I'd argue that one of the most interesting things about crypto is that you can see it as a sentiment indicator for how people feel about their banks and how they feel about their governments. Diehard bitcoin believer, probably not the biggest fan of central banks, Probably someone very worried about the effects of inflation, Probably someone who doesn't like the government telling them what to do. Enter Argentina. One of the countries with the highest rates of inflation in the world, one of the countries with a government that makes it very challenging to move money in and out of the country, and one of the places with the biggest populations of crypto enthusiasts. These facts are absolutely related. Argentina's inflation rate is currently hovering close to one hundred percent, yes, one hundred percent. In this environment, digital currencies are perceived as a safer bet than the peso if you're looking for an asset that will hold its value. My colleague Natcho Oliveradal reported on a recent study that found that nearly two thirds of the nation's crypto investors use digital currencies as a way to protect their savings. This popular enthusiasm for digital tokens has not surprisingly faced pushback from the country's central bank. And now, as the dust settles from the collapse of FTX and the global crypto industry is, as they like to say, trying to rebuild, Argentine regulators are considering tightening oversight even further. NATO is a Bloomberg reporta and a trained economist based in Buenos Aires. He joins me now to discuss Welcome to the podcast. Tell our listeners a little bit about the coverage that you've been doing of crypto and Argentina. Why is crypto so popular among your you know, among folks in the country. Argentina is one of the nine countries with the highest adoption of cryptocurrency. According to the analysis, the cryptocurrencies became very attractive, very successful way to avoid capital controls. Argentina has had strong capital restrictions during age of its last twelve years. Argentine only come by dollars in the capital market at a price that's one hundred percent more expensive. They can't make transfers abroad or from abroad freely. If an Argentina makes transfers in dollars from abroad, the central bank will convert these dollars into pasos at the official exchange rate and the person will lose half of his money. Argentines have learned to live this way in recent years, and that's why they have sold for an infinite number of mechanisms to bypass government restrictions and avoid losing money due to regulations. That's interesting because it sounds like what you're saying is they're trying to use crypto to get access to US dollars that they wouldn't otherwise be able to have. Yes, because by buying and selling cryptocurrency, Argentines can get out of the peso avoiding government rules. They also cancel dollars at a higher exchange and can move their money out of the country free. The Argentine's expectations about the paso, it's so poor that today all of them prefer bitcoin or any other cryptocurrency or where the paso inflation here reaches one hundred percent per year. So the story in pasos is not a good option. So if I'm understanding the two trends that you've identified here correctly. You have, on the one hand, people facing real restrictions on their ability to move money around, especially from Argentina to other countries or from other countries to Argentina. And you have the fact that the paso seems to be, because of inflation, an even less reliable store of value than highly volatile crypto Tooken white bitcoin. Yes, but typically Argentine's use bidcoin either and stable coins. Stable coins in this country are popular because Argentine's thinking dollars. The companies can currently promote the purchase of stable coon as a digital dollars, which is not exactly like that, but Argentine's think that by buying stable coins they can circument restrictions and have the dollars that the government does doesn't allow them to buy. It doesn't sound like that would be super popular with the government, though, if you have a majority or a large number of people in the country being like, how can we work around these restrictions. What's been the reaction of the central bank the last year the Argentine Argentina's Central Bank email a statement in which it provided traditional financial institutions from offering their clients or customers transactions with digital assets, including cryptocurrency, are going that they were risky. It is now that in those days there were different positions on this issue, even within the central Bank, but finally banks had to stay out of the crypto ecosystem. Now something else is happening. Relators start to get involved in crypto issues and are frequently talking with the main players of the crypto ecosystem. Now, the capital market, the Relator and the local Money lander In Agency are working to start regulating the sector in the first half of this year. So is it that they were always going to crack down on crypto because people were trying to use stable coins like you mentioned, to evade these capital controls or did some of this become more urgent for the government after, for example, the collapse of FTX. The Argentina's government changes behavior after the fs event. The country's local Relator is a studying launching requirements on crypto companies, such as proof of solvegncy. Official officials and relators planned to demand that crypto companies have similar requirements as others in capital markets, such as knowledge of the customers transparency about their activities. Also Argentina's government is seeking to strengthen relation before of a visit by the global money launder, which is expected for a September coming up. More from Bloomberg reporto Natural Olivera dol on how the Argentine crypto ecosystem is shaping up post FTX. We'll be right back. Has the collapse of FTX changed or affected the popularity of crypto among the people themselves? Are they more concerned about risks or do they still think it makes sense given the capital controls you described, given the inflation rates close to one hundred percent. Argentina's users were heavily affected by the FTS meldown, with some of the large local crypto exchanges seen withdrawals of as much as twenty five percent of the deposits. The most affected by the by this event was Lemons, which is the Argentina's large exchange in number of users. Lemon had investment in Alamera, the fts found and the panic is spread in social networks. We don't know which is the size of the proportion of investment the Argentines had in FTX, but the industry admit at the end of February that there may be more exchanges affected. So one of the stories that you and your colleagues have reported on is the fact that Argentina has one of the highest percentages of people who want to get their salaries paid in crypto, which very much relates to what you describe before about people wanting options that are not the piso. How easy is it to get a salary in crypto in Argentina. Argentina has a higher proportion of employees getting paid in cryptocurrency than anyone having a salary in pasos in Argentina is a punishment or misfortune. Taxes inflation reduced the salary in Latin America. It was the first presentation of the artists in Latin America received by Argentines, which is today well below the average for the region. The government takes away thirty five person or more from the gross wages, so that seven out of ten Argentines are unsatisfied with their salary. The average salary in Argentina is less than three hundred dollars. It's well below the five hundred dollars in Brazil or the age one hundred and fifty dollars in Chile. This means that Argentinian people preferred cryptocurrency over others, especially since they can't take them out of the country and keep them saved from government threats. Local legislation allows local companies up to twenty percent of payment in time. This way, many companies improved salaries by offering cryptocurrencies. It's so interesting to hear you say that, because in most other places, when we've spoken to folks and they're like, yeah, we in Miami, people are really interested in getting paid in crypto, and then they're like, oh, but they're super not allowed. So you know this, it seems like there's an interesting difference between on the one hand, the government wanting to crack down more on crypto, but on the other hand, there's this loophole that is still allowing people to get at least some of their salaries in bitcoin or other tokens. So it sounds to me like folks in Argentina are dealing with a combination of local effects capital controls, really high inflation rates, incoming potential regulation, and also the broader international crypto winter. Do you see in your reporting any signs that local enthusiasm for crypto is going up or down in twenty twenty three. In the future, then system in Argantina is convinced that this will be the year of blockchain projects and the physical events that day center when I through meda apparent in the ecosystem, I believe then more than half of the crypto started ups will disappeared due to the scarcity of quidd but the projects that give good blockchain based solution will survey a speculation is so where it is the time for the projects. Great natur Thank you so much for joining today. I really appreciate the chance to have you on the show. I'm so excited that you made it. Thank you for our Stacey. That was Bloomberg Reporto Natural OLIVERA. Dol You can find more of his reporting on the Bloomberg terminal and on Bloomberg dot com. For more, be sure to check out our twice weekly newsletter, Bloomberg Crypto. This is Bloomberg Crypto, a daily podcast from Bloomberg and iHeartRadio. For more shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Send us your comments, questions or suggestions for the show to Crypto at Bloomberg dot net. The supervising producer of Bloomberg Crypto is Vicky Vergelina. Our senior producer is Janet Babin. Our producers are Mohammed Faroup and Sharon Barrero. Our associate producers are Ty Butler and Moses on Them. Desta wander Ad is our engineer. Original music by Leo Sidron. I'm Stacy Marie Schml. We'll be back tomorrow.

I'm Stacy Marie Ishmael, Managing editor of Crypto for Bloomberg News, and this is Bloomberg Crypto, a daily Bloomberg IHOT podcast. It's Monday, March thirteenth. I'd argue that one of the most interesting things about crypto is that you can see it as a sentiment indicator for how people feel about their banks and how they feel about their governments. Diehard bitcoin believer, probably not the biggest fan of central banks, Probably someone very worried about the effects of inflation, Probably someone who doesn't like the government telling them what to do. Enter Argentina. One of the countries with the highest rates of inflation in the world, one of the countries with a government that makes it very challenging to move money in and out of the country, and one of the places with the biggest populations of crypto enthusiasts. These facts are absolutely related. Argentina's inflation rate is currently hovering close to one hundred percent, yes, one hundred percent. In this environment, digital currencies are perceived as a safer bet than the peso if you're looking for an asset that will hold its value. My colleague Natcho Oliveradal reported on a recent study that found that nearly two thirds of the nation's crypto investors use digital currencies as a way to protect their savings. This popular enthusiasm for digital tokens has not surprisingly faced pushback from the country's central bank. And now, as the dust settles from the collapse of FTX and the global crypto industry is, as they like to say, trying to rebuild, Argentine regulators are considering tightening oversight even further. NATO is a Bloomberg reporta and a trained economist based in Buenos Aires. He joins me now to discuss Welcome to the podcast. Tell our listeners a little bit about the coverage that you've been doing of crypto and Argentina. Why is crypto so popular among your you know, among folks in the country. Argentina is one of the nine countries with the highest adoption of cryptocurrency. According to the analysis, the cryptocurrencies became very attractive, very successful way to avoid capital controls. Argentina has had strong capital restrictions during age of its last twelve years. Argentine only come by dollars in the capital market at a price that's one hundred percent more expensive. They can't make transfers abroad or from abroad freely. If an Argentina makes transfers in dollars from abroad, the central bank will convert these dollars into pasos at the official exchange rate and the person will lose half of his money. Argentines have learned to live this way in recent years, and that's why they have sold for an infinite number of mechanisms to bypass government restrictions and avoid losing money due to regulations. That's interesting because it sounds like what you're saying is they're trying to use crypto to get access to US dollars that they wouldn't otherwise be able to have. Yes, because by buying and selling cryptocurrency, Argentines can get out of the peso avoiding government rules. They also cancel dollars at a higher exchange and can move their money out of the country free. The Argentine's expectations about the paso, it's so poor that today all of them prefer bitcoin or any other cryptocurrency or where the paso inflation here reaches one hundred percent per year. So the story in pasos is not a good option. So if I'm understanding the two trends that you've identified here correctly. You have, on the one hand, people facing real restrictions on their ability to move money around, especially from Argentina to other countries or from other countries to Argentina. And you have the fact that the paso seems to be, because of inflation, an even less reliable store of value than highly volatile crypto Tooken white bitcoin. Yes, but typically Argentine's use bidcoin either and stable coins. Stable coins in this country are popular because Argentine's thinking dollars. The companies can currently promote the purchase of stable coon as a digital dollars, which is not exactly like that, but Argentine's think that by buying stable coins they can circument restrictions and have the dollars that the government does doesn't allow them to buy. It doesn't sound like that would be super popular with the government, though, if you have a majority or a large number of people in the country being like, how can we work around these restrictions. What's been the reaction of the central bank the last year the Argentine Argentina's Central Bank email a statement in which it provided traditional financial institutions from offering their clients or customers transactions with digital assets, including cryptocurrency, are going that they were risky. It is now that in those days there were different positions on this issue, even within the central Bank, but finally banks had to stay out of the crypto ecosystem. Now something else is happening. Relators start to get involved in crypto issues and are frequently talking with the main players of the crypto ecosystem. Now, the capital market, the Relator and the local Money lander In Agency are working to start regulating the sector in the first half of this year. So is it that they were always going to crack down on crypto because people were trying to use stable coins like you mentioned, to evade these capital controls or did some of this become more urgent for the government after, for example, the collapse of FTX. The Argentina's government changes behavior after the fs event. The country's local Relator is a studying launching requirements on crypto companies, such as proof of solvegncy. Official officials and relators planned to demand that crypto companies have similar requirements as others in capital markets, such as knowledge of the customers transparency about their activities. Also Argentina's government is seeking to strengthen relation before of a visit by the global money launder, which is expected for a September coming up. More from Bloomberg reporto Natural Olivera dol on how the Argentine crypto ecosystem is shaping up post FTX. We'll be right back. Has the collapse of FTX changed or affected the popularity of crypto among the people themselves? Are they more concerned about risks or do they still think it makes sense given the capital controls you described, given the inflation rates close to one hundred percent. Argentina's users were heavily affected by the FTS meldown, with some of the large local crypto exchanges seen withdrawals of as much as twenty five percent of the deposits. The most affected by the by this event was Lemons, which is the Argentina's large exchange in number of users. Lemon had investment in Alamera, the fts found and the panic is spread in social networks. We don't know which is the size of the proportion of investment the Argentines had in FTX, but the industry admit at the end of February that there may be more exchanges affected. So one of the stories that you and your colleagues have reported on is the fact that Argentina has one of the highest percentages of people who want to get their salaries paid in crypto, which very much relates to what you describe before about people wanting options that are not the piso. How easy is it to get a salary in crypto in Argentina. Argentina has a higher proportion of employees getting paid in cryptocurrency than anyone having a salary in pasos in Argentina is a punishment or misfortune. Taxes inflation reduced the salary in Latin America. It was the first presentation of the artists in Latin America received by Argentines, which is today well below the average for the region. The government takes away thirty five person or more from the gross wages, so that seven out of ten Argentines are unsatisfied with their salary. The average salary in Argentina is less than three hundred dollars. It's well below the five hundred dollars in Brazil or the age one hundred and fifty dollars in Chile. This means that Argentinian people preferred cryptocurrency over others, especially since they can't take them out of the country and keep them saved from government threats. Local legislation allows local companies up to twenty percent of payment in time. This way, many companies improved salaries by offering cryptocurrencies. It's so interesting to hear you say that, because in most other places, when we've spoken to folks and they're like, yeah, we in Miami, people are really interested in getting paid in crypto, and then they're like, oh, but they're super not allowed. So you know this, it seems like there's an interesting difference between on the one hand, the government wanting to crack down more on crypto, but on the other hand, there's this loophole that is still allowing people to get at least some of their salaries in bitcoin or other tokens. So it sounds to me like folks in Argentina are dealing with a combination of local effects capital controls, really high inflation rates, incoming potential regulation, and also the broader international crypto winter. Do you see in your reporting any signs that local enthusiasm for crypto is going up or down in twenty twenty three. In the future, then system in Argantina is convinced that this will be the year of blockchain projects and the physical events that day center when I through meda apparent in the ecosystem, I believe then more than half of the crypto started ups will disappeared due to the scarcity of quidd but the projects that give good blockchain based solution will survey a speculation is so where it is the time for the projects. Great natur Thank you so much for joining today. I really appreciate the chance to have you on the show. I'm so excited that you made it. Thank you for our Stacey. That was Bloomberg Reporto Natural OLIVERA. Dol You can find more of his reporting on the Bloomberg terminal and on Bloomberg dot com. For more, be sure to check out our twice weekly newsletter, Bloomberg Crypto. This is Bloomberg Crypto, a daily podcast from Bloomberg and iHeartRadio. For more shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Send us your comments, questions or suggestions for the show to Crypto at Bloomberg dot net. The supervising producer of Bloomberg Crypto is Vicky Vergelina. Our senior producer is Janet Babin. Our producers are Mohammed Faroup and Sharon Barrero. Our associate producers are Ty Butler and Moses on Them. Desta wander Ad is our engineer. Original music by Leo Sidron. I'm Stacy Marie Schml. We'll be back tomorrow.