Argentina Bailout: Why Is the US Buying Pesos When it Could Buy Bitcoin?
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The headline is stark: the US Treasury has just finalized a $20 billion currency swap arrangement with Argentina’s central bank. Bitcoin maximalists are not exactly impressed. To stabilize Argentina’s wobbling economy, it has purchased Argentine pesos directly on the open market. This is no subtle gesture. It’s a full-throttle effort to prop up a key ally at a critical moment. President Javier Milei, a Trump supporter, is battling volatile markets ahead of tense midterm elections. The move raises a question that’s hard to shake. Why is the US buying pesos (an emblem of a fragile, inflation-hit currency) when it could be stacking Bitcoin instead? The ultimate scarce asset and hedge against fiat collapse. The Argentine Pesos Purchase: Not Just About Dollars To understand why the US is buying Argentine pesos, zoom out from the pure financial calculus. Argentina is in crisis. While there’s nothing newsworthy about that statement, its reserves are near depletion. The peso recently plummeted over 6% in a single day, and it has lost around 49% of its value relative to the US dollar in the last year. Bond prices have also cratered, and there’s a real risk of systemic collapse that could rattle global markets. Treasury Secretary Scott Bessent cast this move as “exceptional,” emphasizing that Argentina was facing a moment of “severe illiquidity.” While the International Monetary Fund (IMF) stood behind Argentina’s fiscal strategy, only the US could act quickly enough to provide timely stability. BowTiedMara on X This intervention is about preventing a financial contagion and shoring up trust in Argentina’s dollar-denominated economy. It comes at a time when China has been making inroads with yuan swap lines and mining partnerships in the region. The $20 billion currency swap gives Argentina breathing space to access dollars without sparking a global dollar scramble or forcing…
