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In what may be a world-first, a Bitcoin-based rental agreement was signed and registered in Rosario, Argentina, marking the first of its kind for the country, according to local news reports on 11 January 2024.
A First for Argentina
Bitcoin (BTC) and cryptocurrencies have reached yet another milestone in adoption as the world’s most popular crypto is legally used as a means of payment for rent in Argentina.
As per the contract, the payment terms stipulate that the total sum of monthly Bitcoin payments is equivalent to 100 Tether (USDT), or $100. Argentine crypto platform Fiwind is the agreed-upon payment channel between the tenant and landlord, which according to the Pagina12 report, is one that they are both active users of.
Per a Fiwind spokesperson, this is the first time a contract of this type has been agreed in this currency, with no other records that any other entity has done so.
The report highlights that this is now possible since newly appointed Argentina president Javier Millei put forth a “Decree of Necessity and Urgency (DNU)” that changed rental laws, allowing for new contracts to be agreed “in legal tender or in foreign currency at the discretion of the parties”.
A new legal landscape
The newly appointed pro-Bitcoin president has brought major sweeping reforms to the entire framework of the nation’s government, with one particular decree titled the “Bases for the Reconstruction of the Argentine Economy” passing in 20 December 2023, approving Bitcoin as an “official” currency, paving the way for the use of BTC and other crypto in the country.
At the time, the Minister of Foreign Affairs, International Trade, and Worship of Argentina, Diana Mondino, clarified in a 21 December 2023 Tweet: “We ratify and confirm that in Argentina contract can be agreed in Bitcoin.”
In doing so, this effort to reform the economy and legitimize crypto in the South American country could have a domino effect.
A December 2023 report from DataGuidance, the research arm of security, regulation, and privacy research firm, OneTrust, highlighted that despite recent advances in crypto deregulation remains somewhat inconsistent across many crucial areas such as taxes and restrictions on usage.
Describing the current state of crypto in the absence of unified legislation, Argentina now has “scattered regulations” at national and local levels. But, if further reforms continue to move in favor of crypto, the nation may become one of South America’s crypto hotspots.
Crypto surges in Argentina
When it comes to crypto transaction volumes, Argentina is one of the most active nations in South America, but the entire world. As per several 2023 reports, Argentina’s economic woes are the primary driver pushing citizens to seek out safe havens for their money.
A Chainalysis report published October 2023 showed that between May 2022 and May 2023, a year that saw the Argentine Peso (ARS) fall by around 50% in value, Argentinians were purchasing huge amounts of stablecoin USDT to hedge against high inflation.
Receiving over $75billion in crypto between June 2022 and July 2023, Argentina’s new-found reliance on cryptocurrencies underscores the importance of alternative financial systems and peer-to-peer trade.
With new reforms that allow for things such as rent to be paid for with Bitcoin and other cryptocurrencies, Argentina may continue to establish itself as a hotbed for crypto payments, regardless of whether or not the easing of economic troubles reduces its dependency on crypto.
That said, it remains yet to be seen if Argentina’s economic crisis can be steered in the right direction by the new government.
