As Argentina’s peso continues to weaken ahead of the October 26 midterm elections, citizens are increasingly turning to stablecoins and crypto arbitrage trades to protect their savings and generate short-term profits, Bloomberg reported.
Since early October, the peso has fallen more than 4% against the U.S. dollar, according to Google Finance data. President Javier Milei’s administration has tightened foreign exchange controls in a bid to stabilize the currency, but traders are exploiting price gaps between the official and parallel markets through a crypto-based arbitrage strategy known locally as the “rulo.”
The “rulo” involves buying dollars at the official rate, converting them into stablecoins such as USDT or USDC, and then reselling them for pesos at the parallel market rate, about 7% weaker than the official rate. The difference allows profits of up to 4% per transaction, according to traders interviewed by Bloomberg.
Local exchanges have reported a sharp surge in activity since the central bank barred individuals from reselling dollars for 90 days beginning October 1. Ripio said stablecoin-to-peso sales jumped 40% in a week, while Lemon Cash and Belo saw volumes rise more than 50%.
“Stablecoins are acting as a vehicle to get cheaper dollars,” said Julián Colombo, Bitso’s Argentina country manager. “Because crypto is still lightly regulated, it’s difficult for the government to restrict liquidity in these assets.”
Despite Milei’s success in cutting annual inflation from nearly 300% to about 30%, the peso has lost roughly three-quarters of its value since his administration devalued the currency. Analysts warn that a poor midterm result for Milei’s bloc could trigger renewed devaluation pressures and force further dollar sales by the central bank.
“Stablecoins are here to stay,” said Buenos Aires stockbroker Rubén López. “They’ve given us a refuge from the national currency.”