Cryptocurrencies are quoted above the official value of the dollar in Argentina

Key facts:

Bitcoin and DAI show 12% and 27% spreads respectively against the official dollar.

Increase in exchange restrictions in Argentina would be generating this effect.

In Argentina, the investors who decided to protect the value of their funds by taking refuge in cryptocurrencies, such as Bitcoin or the stable DAI, would already be seeing premiums in their assets. This was stated on Wednesday, September 18, the Chilean-born financial journalist Camila Russo, in a post on her Twitter account.

The journalist, who runs a newsletter on DeFi (decentralized finance), calculated the premiums currently presented by the price differential in Argentine pesos (ARS) against the official dollar and other means of exchange. In this regard, he pointed out that the stable DAI, a currency anchored in a 1: 1 ratio to the price of the US dollar, is trading in Argentina for ARS 71.6, while the official value for USD is ARS 56. This implies a premium. 27% for DAI.

Along these same lines, Russo estimated that bitcoin reflects a 12% differential with respect to the official price. Likewise, the unofficial price of the US dollar, known in Argentina as “blue dollar” or parallel, would be quoted 7% above the 56 official pesos. The analyst said that these differentials have their origin in the tightening of currency control in Argentina.

It should be remembered that last September first, the Argentine government decreed an exchange rate, which prevents the free commercialization of currencies, such as the US dollar, in that country. The new exchange control, which will be in force until the end of 2019, is part of the fall of the Argentine peso, as a result of the adverse results obtained by the ruling party in the primary elections of August 11.

“Why DAI on nitcoin? It is less volatile and linked to Argentina's favorite safe haven for years. Why DAI on black market dollars (‘blue dollar’)? You can buy it on your laptop, store it in a digital wallet, transfer it, take an interest in DeFi, ”said financial journalist Camila Russo.

In Argentina, Dai is trading at 71.6 pesos, while the U.S. dollar rate is at 56. That's a huge premium to hold digital dollars. Reason: Tightening currency controls 💸💸

Argentina's $$ Premiums:
Black market USD: 7%
Bitcoin: 12%
Dai: 27%

(h/t @rubendario222 for pic)

(1/2) pic.twitter.com/m1E1cxZ59K

— Camila Russo (@CamiRusso) 18 de septiembre de 2019

Mariano Di Pietrantonio, community leader of the stablecoin DAI in Argentina, recently told a local media that the volume of operations of this currency was multiplied by 20 after the August election results. “When there is a currency that is devalued, crypto always appears as an alternative. We saw it in Venezuela and Colombia, for talking about two countries in the region, ”Di Pietrantonio told La Nación newspaper.

 As CriptoNoticias reported, Argentine financial analyst Guillermo Escudero has already seen, since August of this year, a possible boost to the cryptocurrency market in Argentina. At the time, Escudero said that investors would seek alternatives to place their funds, within the framework of the Argentine peso's decline. "That's where bitcoin comes in," said the analyst, who said the volume of bitcoin trade would increase gradually, especially because "there is more and more culture on the subject" in Argentina.                                                         

More recently, three other spokespersons for the Argentine ecosystem told CriptoNoticias that exchange control is another factor that encourages the growth of the bitcoin market in Argentina.