Argentina is experiencing a notable surge in the price of USDT, with reports indicating a rise above the 1,280 peso mark on July 8. This effectively prices USDT at approximately USD 1.02, deviating from its usual USD 1.00 peg, as demand for the US dollar intensifies across the Latin American nation.
This development follows a trend observed three months prior, when Lemon Cash, one of Argentina's most popular crypto exchanges, recorded an all-time high for stablecoin purchases. The firm reported a staggering 350% hour-on-hour growth in stablecoin transactions between 10 am and 11 am on April 14.
Lemon Cash further indicated that stablecoin buying is a growing phenomenon in Argentina, with combined USD-pegged coin trading volumes in February this year being 2.5 times higher than the monthly average for 2024.
Experts and media analysts largely attribute this surge to the Argentine government's announcement on April 13 that it would lift a long-standing cap on USD buying. These foreign exchange restrictions were initially imposed in 2019 to combat spiraling inflation rates and declining domestic investment.
However, Argentine newspaper La Nacion suggests that other factors are also at play. Lingering fears of a peso devaluation persist, and despite the government's apparent success in curbing hyperinflation, trust in the local currency remains low.
The concept of "dollarization," a key promise made by President Javier Milei during his 2023 election campaign, which aimed to scrap the Argentine peso and fully adopt the US dollar, continues to influence public sentiment. While full dollarization has not been implemented, Milei's government has recently introduced measures to encourage Argentines to bring their "mattress dollars" back into the formal economy, indicating a continued push for greater dollar integration.
Media outlets also point to growing "uncertainty" ahead of legislative elections scheduled for October 26. Criptonoticias noted that "many savers are seeking refuge in dollar-denominated assets in the face of possible changes in the government’s economic direction."
Additionally, new Christmas bonus rules, which saw companies distribute bonuses to employees in June this year, have led many to invest surplus funds in assets perceived as long-term stores of value, primarily the US dollar and, for a significant number, Bitcoin (BTC). USDT and other USD-pegged stablecoins are frequently used by traders to facilitate Bitcoin purchases.
The phenomenon of "dólar barato" (literally: "cheap dollar") also appears to be driving the market. This concept suggests that savers buy to protect themselves, inadvertently increasing demand and pushing the price up. As the consulting firm Ecolatina explained to La Nacion, an acceleration of the agricultural sector's liquidation process, driven by seasonal demand and a deterioration of expectations regarding the dollar's future value, creates a self-fulfilling prophecy of rising prices.
Reflecting this increased demand, black market dollar prices have also climbed, with La Nacion reporting a 3.25% increase from July 4 to July 7. The MEP dollar rate, a legal avenue for dollarizing savings, similarly rose by 2.4% in the same period.
This surge in stablecoin demand in Argentina comes as USDT operator Tether recently announced it was exploring a joint Bitcoin mining project powered by Brazilian renewable energy sources, highlighting the growing interconnectedness of crypto and traditional financial interests in Latin America.
July 2025, Cryptoniteuae