Microstrategy Founder Michael Saylor Urges Argentina To Embrace Bitcoin Despite Criticism


Microstrategy founder Michael Saylor recently took to Twitter to suggest that Argentina should consider using bitcoin amidst the country’s inflation crisis. While Saylor’s comments have been welcomed by some in the crypto community, there are concerns about the volatility of bitcoin as an alternative to the struggling local currency.

Argentina, Bitcoin as a Hedge Against Inflation

As the Argentinian peso continues to depreciate by over 40% in the last year, Michael Saylor, who is now a bitcoin advocate, tweeted that Argentines now “need bitcoin.” He also shared news about the country’s inflation rate, which has exceeded 7.58% per day.

Saylor’s comments came as some Argentinian politicians considered replacing the peso with the U.S. dollar, an idea that has received widespread support. However, Saylor’s followers on Twitter have voiced their support for choosing bitcoin instead, citing the potential for the cryptocurrency to serve as a hedge against inflation.

The Challenges of Dollarization

While the idea of dollarizing the Argentinian economy has its supporters, there are concerns about the cost and potential drawbacks of this approach. Additionally, the country’s central bank would become subservient to the policies of the U.S. Federal Reserve if dollarization were to occur. Moreover, dollarization would result in the central bank losing its profit earned from printing currency.

Critics of bitcoin as an alternative to the peso argue that the cryptocurrency is too volatile, making it an unsuitable replacement for the faltering local currency. Some have suggested that a bitcoin-backed stablecoin could be the solution, but this is still a work in progress. Nevertheless, Saylor’s comments have sparked a debate about the potential benefits of using bitcoin as a hedge against inflation.

A Way Forward?

The Policy Center for the New South has denounced the idea of dollarizing the Argentinian economy, warning that the country’s fiscal imbalances will not be eliminated by this approach. The center’s policy brief suggests that a selective default of domestic currency liabilities, a brutal devaluation, and/or a unilateral conversion of public deposits may be necessary to achieve dollarization.

While there are valid concerns about bitcoin’s volatility and the challenges of dollarization, it is clear that Argentines need a solution to their inflation crisis. As the country continues to grapple with this issue, it remains to be seen whether bitcoin or dollarization will prove to be the best way forward. However, Michael Saylor’s suggestion to consider bitcoin as an alternative to the peso has certainly sparked a lively debate about the potential benefits and drawbacks of this approach.