Date of Submission
Open Access Senior Thesis
Bachelor of Arts
Argentina’s economic environment makes it nearly impossible to avoid devaluation of personal savings. This is due to the high inflation facing the peso and furthered by foreign exchange controls. I hypothesized that the decentralized and generally unregulated nature of cryptocurrencies could characterize USD-pegged Stablecoins as an alternative savings strategy comparable to saving in USD cash, but more accessible during periods of exchange restriction. To study this hypothesis, I first analyzed the cultural, inflationary and regulatory challenges facing saving in Argentina (relating to The Convertibility Plan of the 1990s, El Corralito, the default on foreign debt in the early 2000s and dollar purchasing restrictions) and then analyzed expected payouts of saving via formal channels, USD-pegged Stablecoins, and informal channels. However, I found that while any cryptocurrency-cryptocurrency transaction does not face governmental regulations, fiat currency-cryptocurrency transactions do face regulations which hinder Stablecoins as a saving strategy. In addition to the regulations that face any transaction in the foreign exchange market in Argentina, the divergence of the informal market value of the Argentine peso (ARS) from the official value of the peso during periods of exchange restriction further nullifies any hypothesized benefits of using Stablecoins as a comparable saving strategy to USD cash when USD cash is less accessible.
Hirsch, Kira, "The Near Impossibility of Saving in Argentina: Exploring Three Options to Combat Devaluation" (2023). CMC Senior Theses. 3337.