Bitcoin News Today: U.S. Lifeline for Argentina Sparks Domestic and Crypto Backlash

The U.S. Treasury has moved to stabilize Argentina's faltering economy with a $20 billion currency swap agreement and direct purchases of Argentine pesos, a move that has drawn both praise and criticism as the Trump administration deepens its financial support for President Javier Milei's government. The intervention, announced by Treasury Secretary Scott Bessent, aims to address Argentina's acute liquidity crisis and bolster Milei's reform agenda ahead of pivotal mid-term elections in October.

The swap framework, finalized after four days of negotiations with Argentine officials, includes the Treasury's rare open-market purchase of pesos, which sent the currency up 0.8% to 1,418 per dollar on Thursday. Argentina's 2035 bonds surged 4.5 cents to 60.5 cents on the dollar, reflecting renewed investor confidence. The U.S. action follows a $20 billion IMF loan program approved in April, marking Argentina's third IMF bailout since Trump's first term.

Bessent emphasized that Argentina's fiscal strategy is "sound" when anchored to discipline, despite the country's history of defaults and devaluations. The Treasury's support is seen as a political gambit to strengthen Milei's position ahead of elections, where his party seeks to solidify control amid legislative efforts to curb his power via executive decrees. However, public discontent over austerity measures remains high, casting doubt on whether the U.S. lifeline will translate into electoral gains for Milei.

The move has sparked bipartisan backlash in Washington. Democratic lawmakers, including Senator Elizabeth Warren, condemned the use of the Exchange Stabilization Fund to prop up a foreign government while the U.S. government faces a partial shutdown. Critics argue the intervention contradicts Trump's "America First" rhetoric, with Warren accusing the administration of prioritizing "billionaire buddies" over American taxpayers.

Meanwhile, the crypto community has expressed frustration that the Treasury did not allocate funds to Bitcoin instead of pesos. Analysts like Quinten Francois criticized the decision on social media, suggesting the U.S. missed an opportunity to invest in a "store of value" asset. This debate comes as the Trump administration finalizes plans for a Strategic Bitcoin Reserve, announced in March 2025 to hold seized crypto assets as part of a broader diversification strategy. However, the immediate focus remains on Argentina, where U.S. support is framed as critical to maintaining regional stability and advancing free-market policies.

Argentina's financial rescue is further complicated by its $18 billion currency swap with China, which the U.S. has sought to phase out. Special Envoy for Latin America Mauricio Claver-Carone called the Chinese arrangement "extortionate," while Beijing defended it as a "mutually beneficial" partnership. Argentina recently renewed the swap through mid-2026, using yuan liquidity to cushion its dollar-starved economy. The U.S. has yet to specify whether its new swap will reduce Argentina's reliance on Chinese financing, but the political tensions underscore the broader U.S.-China rivalry over influence in Latin America.

As the peso stabilizes and markets rally, the long-term success of the U.S. intervention remains uncertain. While the swap provides immediate relief, Argentina's structural challenges-including hyperinflation and eroding investor trust-persist. For now, the Trump administration's actions reflect a dual strategy: reinforcing Milei's reforms to secure a pro-market ally in the Western Hemisphere while navigating domestic and international pushback over the costs of foreign financial bailouts.

Source: [1] U.S. buys Argentinian pesos, finalises $20bn currency swap (https://www.cnbc.com/2025/10/09/us-buys-argentine-pesos-agrees-to-20-billion-swap-line-bessent-says.html?msockid=32bd16fe795f659a273f007d784b64ba)

[2] U.S. launches financial rescue of Argentina, Treasury ... (https://fortune.com/2025/10/09/treasury-argentina-bailout-20-billion-scott-bessent-milei/)

[3] US buys Argentinian pesos, finalises $20bn currency ... (https://www.aljazeera.com/news/2025/10/9/us-buys-argentinian-pesos-finalises-20bn-currency-swap-says-us-treasury)

[4] US Treasury Buys Argentine Pesos Wort... (https://themarketperiodical.com/2025/10/11/us-treasury-buys-argentine-pesos-worth-20b-crypto-analysts-react/)

[6] China, US clash over major Argentina currency swap line (https://www.reuters.com/markets/currencies/china-us-clash-over-major-argentina-currency-swap-line-2025-04-08/)

[10] Establishment of the Strategic Bitcoin Reserve and ... (https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserve-and-united-states-digital-asset-stockpile/)