- Juan AgustÃn D’Attellis Noguera from Argentina’s central bank champions the idea of a central bank digital currency (CBDC) to revitalize the national economy.
- The key advantage of the proposed ‘digital peso’ is its traceability, aiding in tax collection and reducing dependency on the U.S. dollar.
Digital Peso: A Hopeful Horizon for Argentina’s Economy
Juan AgustÃn D’Attellis Noguera, a distinguished director at the Banco Central de la República Argentina, has joined forces with Economy Minister Sergio Massa, voicing his approval for the development of a central bank digital currency (CBDC). They see it as a game-changing solution to address the economic challenges facing the nation.
The Traceability Factor: A Boon for Tax Collection
While sharing his insights on local television, Noguera expressed optimism about the “digital peso,” envisioning it as a beacon of stability for the Argentine economy by 2024. Delving into the intricacies of CBDC, Noguera highlighted the pivotal role of traceability. This inherent feature of the CBDC ensures transparency in transactions. Even though the identities behind transactions remain private, the mere evidence of these operations can broaden the nation’s tax base.
Noguera elucidated,
“With the traceability of digital currency operations, the government will gain insights into transactions. While participants’ identities remain undisclosed, the transparency ensures transactions aren’t missed. This not only widens the tax net but may also lead to a scenario where tax rates can be potentially lowered.”
Furthermore, the CBDC, with its inherent stability, is expected to play a crucial role in addressing Argentina’s monetary dilemmas. The ongoing volatility of the Argentine peso often sees it rivaling the U.S. dollar, even in local payment scenarios. This digital innovation aims to reduce such dependencies and instabilities.
Highlighting the roadmap for the CBDC, Noguera conveyed a sense of certainty about its implementation. He envisioned a gradual introduction, with the ‘digital peso’ initially coexisting with traditional cash. Eventually, the goal is to transition entirely to this digital format, phasing out paper-based fiat currency.
Economy Minister Sergio Massa, who is also vying for the presidential seat, has promised to prioritize the CBDC’s launch to address Argentina’s persistent inflation issues. Interestingly, the electoral race sees Massa slightly behind Javier Milei, a candidate advocating for Bitcoin and voicing against central banking practices, who proposes adopting the U.S. dollar as Argentina’s primary currency.
