Argentina's Stablecoin Surge: 94% of Peso Trades End Up in Dollar-Tied Cryptos
In Argentina, more than 94% of pesos traded against cryptocurrencies end up in stablecoins, digital currencies tied to the value of the US dollar. A study by the a16z crypto fund found that Argentina leads the global ranking in this regard, followed by Mexico and Brazil.
Stablecoins are designed to maintain parity with the US dollar, with issuers keeping reserves such as U.S. Treasury bills and bank deposits to back each unit in circulation. The two largest stablecoins are USDT from Tether and USDC from Circle, which together account for 88.6% of a market that hovers around $290 billion.
One of the most common uses of stablecoins is dollarization with immediate liquidity, allowing users to buy and sell dollars without opening a foreign currency bank account. They can also be used to receive income from abroad, send money internationally, and pay while traveling.