- Government of Argentina announced to impose a 35 per cent tax on the purchase of foreign currency purchase
- Peso has fallen as much as up to 3 per cent after the 35 per cent tax was implemented
- Various data from peer-to-peer exchange shows that since the tax was imposed ARS/BTC trading has witnessed significant growth.
Argentina’s Peso is on a falling streak, and by the looks of things, the slide will not stop anytime soon. Last week when the government of Argentina announced to impose a 35 per cent tax on the purchase of foreign currency purchase. The further downfall of the Peso wasn’t the result they were hoping for, instead of stopping the residents from hoarding USD and strengthening the position of the Peso were the results they expected. Unfortunately, that didn’t happen, but what was interesting to watch was an increase in the purchase of cryptocurrencies by the residents.
The Fall in Peso Continues
As per the Bloomberg, the Peso has fallen as much as up to 3 per cent after the 35 per cent tax was implemented. What comes as a burden was the fact that this tax is the add-on to the previously imposed “solidarity tax”. According to that, all non-importation USD-denominated transactions will be taxed at 30 per cent. This tax was aimed to target Argentinians who were using USD as a hedge for the time when peso rates downfall and any USD-denominated purchase being made through debit and credit cards.
The new 35 per cent tax was extended to overall forex transactions but excluded purchases that will be made in industries of healthcare, pharmaceuticals, online education, books, fire protection equipment or any R&D related projects.
Fall in Peso, Rise in Crypto Use
Various data from peer-to-peer exchange shows that since the tax was imposed ARS/BTC trading has witnessed significant growth. Converting ARS peso is the talk of the town since and building momentum. The data from the exchanges is also projecting that Peso is on the downward road of a trend. Two of the world’s largest peer-to-peer crypto trading platforms’, Local Bitcoins and Paxful’s data launched that there was the surge in Bitcoin purchase for the entire past month.
An earlier survey conducted by Paxful also gave similar results. The study conducted in August 2002 showed that Argentinians are putting more faith over crypto and believes it to be the best available mechanism for preserving their savings against peso fall.