Argentine President Javier Milei announced his government's plans for the second year in office, which include cutting national taxes by 90% to alleviate the burden on Argentinians and allowing provinces to set their own tax rates.
Additionally, Milei announced that a free currency circulation plan will be implemented in 2025, allowing Argentinians to conduct business in the currency of their choice, including Bitcoin.
Specifically, it is mentioned that Argentine President Javier Milei announced a series of significant reform measures on the occasion of his first anniversary in office. In a televised address, he mentioned that currency controls will be lifted in 2025 and that dollar transactions will be fully implemented, meaning that all businesses previously allowed to transact only in pesos can now operate in dollars. Additionally, Milei announced a new tax plan that will eliminate 90% of current taxes.
CCTV also reported President Milei's speech, confirming that a comprehensive reform package, including fiscal, political, and security measures, will take place in 2025, and reiterated the plan to reduce national taxes by 90%.
These reports indicate that President Milei's reform plan aims to alleviate the burden on the Argentine people and improve economic efficiency. The removal of currency controls and the implementation of dollar transactions may be aimed at enhancing the international competitiveness of the Argentine economy, while reducing taxes may be intended to stimulate domestic economic activity. However, the specific implementation and effects of these measures remain to be seen.
Although
In President Javier Milei's reform plan, there was no explicit mention of Bitcoin in these reports. However, from a broader perspective, Bitcoin and cryptocurrencies may have the following connections to these policies:
Currency Liberalization: The measures proposed by President Milei to remove currency controls and fully implement dollar transactions indicate that the government is seeking to increase the freedom of currency circulation. This policy direction may create conditions for the wider use of cryptocurrencies, such as Bitcoin, in Argentina. In a more open monetary environment, individuals and businesses may be more inclined to use cryptocurrencies like Bitcoin for transactions, especially in cross-border transactions.
Tax Policy: The cancellation of 90% of national taxes may have an indirect impact on the cryptocurrency market. If the new tax policy adopts a more lenient stance towards cryptocurrency trading, it may attract more investors and traders into Argentina's cryptocurrency market.
Economic Stability: Argentina has long faced issues of economic instability and inflation. In this context, some Argentinians may have viewed Bitcoin and other cryptocurrencies as a means of asset preservation. If government reforms can stabilize the economy and reduce inflation, it may affect the demand for cryptocurrencies like Bitcoin.
Fintech Development: The fiscal and financial reforms included in President Milei's reform plan may promote the development of the fintech industry, which naturally includes cryptocurrencies and related technologies.
Moreover
In 2024, Argentina's cryptocurrency market showed significant growth, primarily driven by high inflation and currency devaluation. Argentina is currently facing a severe inflation problem, with an inflation rate of 276%, making cryptocurrencies a popular choice for combating inflation and preserving value. Stablecoins like Tether (USDT) have been widely used in Argentina. According to relevant statistics, Argentina is one of the countries with the highest cryptocurrency adoption rates in the world, with many residents viewing it as a secure means of wealth storage. Between June and December 2024, Argentina's cryptocurrency trading volume increased by over 400%, but due to the overall small market size, its market share remains below that of Brazil and Mexico.
Political instability, inflation, and a large population without bank accounts are the main factors driving the growth of the cryptocurrency market in Latin America. In Argentina, political turmoil and economic issues have led to the devaluation of traditional currency, making cryptocurrencies a safe-haven tool. Many people hold cryptocurrencies like Bitcoin to protect their assets from the depreciation of their national currency. Moreover, since many cannot access traditional banking services, cryptocurrencies provide them with a means to conduct transactions and save.
To regulate the cryptocurrency market, Argentina's National Securities Commission (CNV) announced the launch of a registry for Virtual Asset Service Providers (VASPs) in June 2024. According to these new regulations, all individuals and entities engaged in activities related to virtual assets, regardless of their residence or registration location in Argentina, must register with the CNV. These measures aim to enhance market transparency, protect investor rights, and promote the healthy development of the cryptocurrency market.
Overall, Argentina's cryptocurrency market is showing robust growth in 2024, primarily driven by economic challenges and the public's distrust of the traditional financial system. At the same time, the government's regulatory measures are gradually advancing to promote the healthy development of the market.
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