Argentines receive salary in cryptocurrencies to escape exchange control and high inflation
The Argentine peso is facing 50% annual inflation, which basically means that every year a citizen can lose half of their purchasing power if they keep their savings in the state currency.
But it is not just to protect themselves from inflation that Argentines are interested in receiving their salary in cryptocurrency. Due to the exchange controls applied in the country, the worker who receives the full salary through the banking system is harmed.
If the company pays the employee with cryptocurrencies, the worker is able to exchange the digital currencies for Argentine pesos on exchanges at an unregulated parallel exchange rate. This results in a considerable difference in the end.
According to an estimate by O Globo, an Argentine with a monthly salary of $1,000 can receive up to 83% more Argentine pesos if they choose to receive cryptocurrencies and convert their remuneration outside the official exchange rate.
Local legislation allows Argentine companies to pay up to 20% of their salary in cash, which leaves room for payment to be made in cryptocurrency. But Andrés Ondara of Bitso said that some companies circumvent that 20% threshold, essentially offering people even better offers.
“Cryptocurrency improves local wages,” Matias Dajcz, from Ripio, told Globo.
According to Argentinean broker Buenbit, the number of companies that pay employees in cryptocurrencies has increased by 340% in the last 12 months.
As a result, Argentina currently remains the country with the highest share of employees paid in cryptocurrency in the world, says Deel, a company specializing in payroll.
The digital assets most chosen by Argentines for receiving wages are dollar-backed stablecoins, Bitcoin (BTC) and Ether (ETH).
Recently, the Argentine government committed to discouraging the use of cryptocurrencies in the country in an agreement with the International Monetary Fund for debt renegotiation.+