Stablecoins and inflation in Latin America: the case of Argentina

Abstract

PurposeThe purpose of this academic paper is to analyze Argentina’s inflationary situation through an understanding of its monetary policy over the years, and to identify its effect on the country’s poverty, explaining the relationship between fiat currencies and stable currencies.Design/methodology/approachBy analyzing the case of Argentina through descriptive methodology, the authors provide information on the use of stable currencies in Argentina and the reasons behind their use.FindingsThrough descriptive research, the authors were able to find out the situation regarding the use of stable currencies in Argentina. We identified how the country’s monetary policy has affected inflation and thus purchasing power parity.Research limitations/implicationsGiven that cryptocurrency information is based on privacy, there are certain arguments that must be referred through qualitative aspects.Practical implicationsThe importance of stablecoins in high inflation countries.Social implicationsThe understanding on how cryptocurrencies are able to maintain purchasing power and help avoid inflation related poverty.Originality/valueDiscussion of cryptocurrency items, specifically stablecoins, has been limited due to their recent emergence and the existing discussion about their legality. The study presents an argument on the use of stablecoins by presenting a case that has not yet been studied.