Argentina and Paraguay Use Bitcoin to Settle Export
Cryptocurrency’s growing use as a payment currency was clearly demonstrated when a recent trade deal between Argentina and Paraguay was settled not in U.S. dollars, but in Bitcoin (BTC).
Yes, you got that right.
According to news published by various major outlets in mid-February, Paraguay allegedly imported agricultural products, including pesticides, from Argentina worth $7,100. To settle the transaction and pay the Argentine supplier, the importer decided to use the world’s most popular cryptocurrency bitcoin. The buying party first paid in BTC before a payment processor converted the crypto into Argentine pesos. The company then remitted the fiat into the account of the Argentine-based supplier.
Argentina leveraged crypto payments processor Bitex, a financial services company based in the Latin America region. Uniquely, the bitcoin payments processor is an entity that forms part of the Simple Export project started by the Argentine government.
Manuel Beaudroit, the chief marketing officer at Bitex explained their role in the trade, stating that the government’s plan is to improve efficiency within its cross-border transactions, and blockchain-based solutions appear to hold the key to that.
The Bitex/Argentina collaboration began in May 2018 when the firm teamed up with local bank Masventas to develop a cross-border payments network, which the bank noted would provide services similar to those provided by global interbank network SWIFT.
The successful transaction between Paraguay and Argentina is, therefore, part of that initiative, but more importantly, it gives crypto a much-needed boost as it looks for mainstream adoption.
The Latin America region, which unfortunately has seen massive financial and economic upheavals, remains one of the cryptocurrency’s most crypto-friendly places.
We have seen a greater move towards crypto payments in Venezuela where DASH appears to have gained a lot in terms of everyday use at shops and online. An economist in the country recently urged the country’s leadership to adopt crypto payments alongside the national currency Bolivar as a way to help combat runaway inflation and cut impact on commerce.
The LocalBitcoins transaction volumes are also very high in the region of Argentina and Venezuela, two of the leading nations. Adoption by the public is even more higher in Argentina after the country’s public transport sector saw the unveiling of support for bitcoin when users want to load their local travel card called SUBE (Unique Electronic Ticket System- Sistema Único de Boleto Electrónico).
With more than 7 million people using the card in about 40 locations, the chances of using crypto to pay for such services have increased considerably. It is the same in Paraguay, with the country’s “Golden Goose Project” likely to contribute not only to blockchain integration but also crypto adoption for payments. In any case, there is precedence already that the bitcoin’s use for transactions is very much in place.