BitBeat: Why Bitcoin’s Scoring in Argentina

argentina26 June 2014 / Wall Street Journal – In Argentina, the exact opposite occurs. Firms such as San Francisco-based BitPagos will take the dollars received by tourism industry clients in Buenos Aires and deliver them bitcoins in return.

That their clients are opting for this says much about Argentina’s dysfunctional financial system and bitcoin’s potential to provide an escape route for citizens of countries with strict currency controls.

By taking bitcoins in place of dollars, a merchant in Buenos Aires ends up with a much more favorable exchange rate, one that’s far closer to the rate reflected in Argentina’s burgeoning underground currency market than to the official one.

Right now, every dollar received from credit card purchases that’s processed through the Argentine banking system will pay out 8.15 pesos, the official fixed rate. If the payment were made in cash, a merchant could get around 12 pesos per dollar in one of Buenos Aires’s clandestine “cuevas,” or caves. Bitcoin brings them out in middle of those exchange rates, though much closer to the higher end.

On the person-to-person trading site Local Bitcoins Argentina, the going rate for selling bitcoins is around 6,400 pesos. Based on the current Coindesk Bitcoin Price index of $564.48, that translates into a round trip of 11.34 pesos per dollar, 39% better deal than the official rate.

Hence the apparently fertile ground that bitcoin is finding in Argentina….. Read more

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