The Argentinean government has announced that it will invest in as many as 40 blockchain technology projects over the next four years, leaving economists wondering whether it is trying to resolve its currency crisis with cryptocurrencies.
Argentina’s Ministry of Production and Labor has partnered with Binance Labs. Under the agreement, the government will give US$50,000 in matching investment to 40 blockchain technology startups that Binance chooses to place its bets on.
Throughout the four-year term, the government will match investments in up to 10 blockchain projects each year. It has made it clear that the goal is to ‘solve local issues’ by supporting blockchain-based products and services.
Binance is organizing a 10-week incubation program for blockchain technology startups in Buenos Aires later this month.
There is little doubt that Argentina is getting cozy with cryptocurrency. The country’s public transport agency has recently allowed people to pay for bus and railway tickets in bitcoin. And it is home to the second largest number of Bitcoin ATMs in Latin America.
Binance Labs says it will also help with framing regulatory and legal measures, recruiting, technical execution, fundraising and marketing resources for the blockchain projects.
Cryptocurrencies are not reliable and are vulnerable to volatile fluctuations. More than anything else, they are not backed by central banks.
With its peso losing half of its value and inflation hitting 31.2%, Argentina’s economy is already in turmoil. Therefore, analysts are of the belief that cryptocurrencies will make things more complicated.