Argentine province supports stablecoins for tax payments

• Mendoza residents can use DAI or USDT stablecoins to pay for government services.
• The rising inflation rate in Argentina may have contributed to Mendoza authority’s preference for inhabitants to transact with crypto.

According to an August 27, 2022 announcement by the government of Mendoza province, residents in the region can pay their taxes with stablecoins. The Mendoza Tax Administration (ATM) provides more online payment options for its nearly two million residents to pay their taxes. The official statement said the move would enable the region to align with innovation and modernization.

MakerDAO’s DAI and Tether’s USDT are the two crypto payment options available on the 11-page report that explains how the crypto payment works. Residents can pay taxes using crypto wallets from Bybit, Lemon, Binance, Buenbit, or Bitso. Once a taxpayer fills out their basic information, the ATM site will create a QR code for that payer to scan with their crypto wallets.

After the site receives the stablecoins, it will convert USD-pegged tokens to pesos. Then, issue a transaction receipt to the taxpayer. With about two million residents, Mendoza is Argentina’s fourth most populated region. This province is located in the western part of Argentina, east of the Chile republic and south of San Juan.

Argentina isn’t new to crypto; the nation has been struggling with serious inflation and state bankruptcies. Given the country’s 64 percent year-on-year inflation rate as of last month, it isn’t surprising that Mendoza authorities deem it fit to enable crypto payment settlement for its residents. Despite the current crypto winter, many still consider digital assets as a hedge against inflation. America’s 8.5 percent inflation appeals to many since the stablecoins are pegged 1:1 to the US Dollar.

Argentina’s crypto space

Recently, there has been a spike in Argentinians trading crypto, with many swapping buying US Dollars with Pesos. Hence, it wasn’t surprising that Argentinian authorities restricted this activity. last month, Argentina’s central bank announced that it would bar anyone purchasing digital currencies from accessing the local currency exchange market. The move was to reduce US Dollar purchases.

Even though president Alberto Fernandez (Argentina’s President) said, he won’t mind if the country adopts bitcoin as a legal tender. However, recent events show that the government has a complex relationship with crypto. Earlier in the year, Argentina included digital assets in its anti-money laundering regulatory policy.

Related: Two largest private banks in Argentina to allow clients to trade crypto

Thus, virtual asset providers, including crypto exchanges, must provide additional client details to the government when requested. While the federal authorities in Argentina want to regulate crypto, its provinces, such as Mendoza, want more people to adopt crypto. Hence, they are making moves towards it. Four months ago, Argentina’s Buenos Aires province announced plans to enable crypto payments for commercial transactions.

The ATM’s crypto adoption is the latest in Argentina’s list of recent crypto adoptions. A few weeks ago, global payment tech firm, Mastercard, announced that it’s about to launch a card that supports 14 digital currencies (including USDT) in the country. Then, Mastercard would launch a broader rollout that supports crypto payments with Mastercard in 90 million virtual and physical stores worldwide.