Argentinian President Milei Paves the Way for Provinces to Launch Local Currencies

Argentine President Javier Milei (photo: x @infobae)

JAKARTA - Argentina's President, Javier Milei, promised not to hinder the provinces' efforts to launch their own currencies following a public exchange between Milei and the Governor of La Rioja Province, Ricardo Quintela.

On January 14, in an interview with Radio Miter, Milei confirmed that he would not legally obstruct the creation of local currencies by provincial governments in Argentina.

The president believes that markets will ultimately determine the value of the projects, but he warned that "quasi-currency" would fuel inflation and people who accept the currency would fall victim to fraud.

"Those who receive payments in quasi-currency from irresponsible governors will clearly see a decline in their income. What is not taken from them through budget adjustments will be taken from them through inflation in quasi-currency," Milei said.

Quintela, the governor of La Rioja, intends to create a separate currency for the province after Milei lowered the value of the Argentine peso by 50% after taking office on December 10, 2023, to curb the country's soaring inflation, reaching a 32-year high. The new president also cut funds allocated from the federal budget to the provinces.

Describing the measures as "abandonment by the state" and citing the need to pay police salaries, Quintela called on La Rioja's legislature to prepare a legal basis for printing local currency. In December 2023, the governor of Buenos Aires province, Axel Kicillof, also publicly discussed the local currency issue.

Meanwhile, in Rosario, Argentina's third largest city, a property owner and tenant agreed to rent payments made in Bitcoin (BTC). The contract is the first of its kind in Argentina, made possible by new legal changes by the new presidential administration.