Argentina, Land of Currency Crises, Warns About Crypto Risks
The Argentine central bank and securities regulator put out a joint statement Thursday to alert people on the problems associated with crypto investing. While many governments and financial authorities have urged caution with these types of assets, the irony isn’t lost given the country’s troubled economic history of currency devaluations, hyperinflation and wiping out citizen savings.
Cryptocurrency “can cause significant financial losses for its holders, including the possibility of losing the totality of the resources invested,” according to the statement, which also reminds potential investors that they aren’t legal tender.
That point hits home in Argentina, where the peso has lost more than 80% of its value in the past four years. In 1989, hyperinflation wiped out the country’s currency and the world’s largest sovereign debt default in 2001 triggered an overnight devaluation. Argentines largely keep their savings in U.S. dollars despite strict controls in place that limit exchanging pesos for greenbacks.
The government bodies also said in their statement that despite the risks, crypto trading isn’t at “significant levels of use and acceptance,” in Argentina.