USDT Prices Surge 2% in Argentina Amid Dollar Demand

USDT prices in Argentina have surged as demand for US dollars spikes. On July 8, the price of USDT rose above the 1,280 peso mark, equivalent to USD 1.02, rather than the standard USD 1.00. This surge comes just three months after the Lemon Cash platform recorded an all-time high for stablecoin purchases, with stablecoin transactions growing by more than 350% hour-on-hour between April 14, 10 am and 11 am.

The growing trend of stablecoin buying in Argentina is attributed to several factors. The Argentine government's announcement on April 13 to lift a cap on USD buying has been a significant driver. The foreign exchange restrictions, imposed in 2019 to address inflation and falling domestic investment, have been a barrier to USD purchases. However, the lifting of these restrictions has led to a surge in demand for USD-pegged coins.

Fears of a peso devaluation and low trust in the peso, despite the government's efforts to combat hyperinflation, have also contributed to the rise in USDT prices. Additionally, the upcoming legislative elections in October and the new Christmas bonus rules, which saw companies pay their employees bonuses in June, have led many to invest surplus funds in assets they believe can store value in the medium and long term. For many, this includes the US dollar and Bitcoin, which remains popular in Argentina.

Experts have also pointed to the concept of the “dólar barato” (cheap dollar) as a factor driving the dollar market. This phenomenon sees savers buy dollars to protect themselves, increasing demand and pushing prices up. The acceleration of the agricultural sector’s liquidation process, where farmers and exporters convert their foreign currency earnings from agricultural exports into fiat pesos, has also contributed to the rise in USDT prices.

Black market USD prices are also on the rise, climbing 3.25% from July 4 to July 7. The rate of the MEP dollar, used to legally dollarize savings as an emergency measure, climbed 2.4% from ARS 29.52 to ARS 1,276.44 in the same period. This further highlights the growing demand for USD-denominated assets in Argentina.

In summary, the surge in USDT prices in Argentina is driven by a combination of factors, including the lifting of USD buying restrictions, fears of peso devaluation, upcoming elections, new bonus rules, and the “dólar barato” phenomenon. These factors have led to a significant increase in demand for USD-denominated assets, including USDT, in the Latin American nation.