Yesterday I was listening to The Wolf Of All Streets (Scott Melker) interviewing Charles Hoskinson (ADA) and it is surprising the small snippets of information you learn. The interview was more about his role within the crypto advisory commission and the various challenges they face to get crypto regulation passed as quickly as possible.
During the interview Charles mentioned stable coins in Argentina and what type of impact they have played within that country. Argentina's citizens have a reported $100 Billon invested in crypto with a high percentage in stable coins.
You would be asking why stable coins and looking at the Argentinian Peso's performance I think it becomes rather obvious. The current rate is $1 = 1076 Argentinian Peso's so the graph above highlights in the last 2 years the currency has devalued by more than half again.
Apparently in the pat before the population started buying stable coins they withdrew their money out the banks and purchased black market dollars paying a premium price before going back to the bank and placing those dollars in safety deposit boxes. Sounds a little crazy, but what choice did they have because leaving their savings or wealth in a bank account would have seen it absolutely wiped out.
With the introduction of stable coins the change was obvious and now they can buy crypto stable coins and not have to worry about paying a premium price and storage fees for a safety deposit box. Argentina as an economy is now for every $7 in value there is $1 of stable coins so crypto makes up 14% of Argentina's wealth.
This is a type of adoption in another sense as even though they are not making anything from their investment they are protecting wat they have. For every dollar saved is a dollar gained and highlights how significant and important stable coins are.
When you are faced with such a down ward decline in your currency you have to find other areas to hold on to what you already have or lose it all. I thought we had things bad in South Africa with the Rand, but Argentina is on another level entirely.
The Rand has nearly halved in value over the last 15 years and that is bad enough and I am sure many in SA are doing something similar. I have kept money outside the country and that money will never enter this country due to devaluation.
Being in crypto is not necessarily about Bitcoin or Eth or Alt coins, but stable coins as well and not how we always thought. I have viewed stable coins as a safe haven when the markets turn red and not as a safe haven for my entire wealth like the Argentinians are doing.
Over the next decade I think we will find more and more people will be using stable coins this way as a store of value and not necessarily to make money. The world has definitely changed economically and we will hear more and more countries using similar methods. I can recall those in Turkey buying Bitcoin as a safe haven a few years ago and possibly those people are now into stable coins even thought they would have done well financially to remain in Bitcoin.