Argentina's President Is Open to Bitcoin — the Central Bank Isn't

Argentina's president Alberto Fernandez is open to the idea of the South American country issuing a central bank digital currency (CBDC) or adopting Bitcoin.

In an interview with local media outlet Filo News, Fernandez showed himself open towards Bitcoin, although he admitted he wasn't too familiar with the digital asset space.

Responding to a question about the possibility of a CBDC or even Bitcoin as legal tender, he said, “I don’t want to go too far out on a limb [...] but there is no reason to say ‘no’.”

Fernandez further stated that Bitcoin could combat inflation in the country. Argentina has been hit with rapidly growing inflation; the country's year-over-year inflation in July topped 50%. In the first seven months of the year alone, living costs have increased by around 29%.

This inflation could effectively be "nullified" with Bitcoin, Fernandez said.

Yet at this point, the idea of adoption Bitcoin appears to be no more than musing on the president's part, who further added that many people "have concerns" with regards to cryptocurrencies based on limited understanding of how they work. Yet "it is something to consider," he said.

Fernandez's statements are likely inspired by first-mover El Salvador, which passed its famous Bitcoin Law in June, officially declaring Bitcoin legal tender.

Meanwhile, Argentina's central bank has shown itself much less open, with Banco Central de la República Argentina (BCRA) president Miguel Pesce saying at a conference this week that Bitcoin "is not a financial asset" because it "cannot generate any profitability."

Pesce announced the BCRA's plans to "regulate the intersection of Bitcoin with the payment system and the exchange market," reasoning the move with cryptocurrencies being "used to obtain undue gains" that hurt "unwary or unsophisticated people."

Bitcoin "was created as a substitute transaction mechanism for money in which the state fulfills no role," Pesce further said; Bitcoin's scarce nature "causes its price to rise and leads to the confusion that it is a financial asset."