The world's largest cryptocurrency exchange, Binance, announced on Tuesday that it has launched a new service in Argentina that will allow users to buy and sell digital currencies directly with local pesos.
The move comes at a time when Argentina is facing one of the highest inflation rates in the world, eroding the purchasing power of its citizens and increasing demand for alternative assets.
Binance Increases Presence in Another Country Despite Regulatory Pressure in the US
The move allows Argentines to transfer pesos to their Binance account through a local partner, which can then be used to buy cryptocurrencies. Until now, Binance has only operated in Argentina as a brokerage platform that matches crypto buyers and sellers.
"This launch is about the societal demand that exists here," Maximiliano Hinz, Binance's Southern Region Director, told Reuters on Tuesday, adding that Argentina is a key market for the stock market.
Hinz said that local users will be able to transfer pesos to their Binance account and see their balance reflected in the local currency, which in turn can be used to buy crypto.
Binance is facing regulatory scrutiny in the US and elsewhere, as expansion, volatility and risks make cryptocurrencies more attractive in Argentina, where annual inflation is over 100%.
Late last month, the U.S. Commodity Futures Trading Commission (CFTC) sued the company and CEO Changpeng Zhao for engaging in activities the regulator claims to be an "illegal" exchange and a "fake" compliance program.
Argentina does not regulate crypto exchanges, but the country's central bank has repeatedly warned of the risks of cryptocurrencies, and market regulator CNV is supporting a bill to register providers offering virtual assets.
In Argentina, inflation is seen as a serious economic problem affecting the living standards of millions of people. The annual inflation rate reached 102.5% in February 2023, the highest level since 1991 when the country came out of hyperinflation, according to the latest data from the country's statistics agency.
*Not investment advice.