Businesses in Argentina, including technology firms, have begun paying their employees in cryptocurrencies, as the South American country slips deeper into an economic mess amid high inflation and currency devaluation.
The number of companies paying salaries in cryptos has increased by a staggering 340% in the last 12 months, reported Buenos Aires Times citing data from Buenbit, an Argentine crypto exchange.
Under Argentinean law, businesses can pay up to 20% of their employees’ salaries in digital currencies. Some companies have even exceeded this limit, according to the journal.
“Tech companies, in particular, are paying a portion of wages in so-called stablecoins pegged to the dollar, as well as in other cryptocurrencies such as Bitcoin and Ethereum,” the periodical added.
Many employees might have suffered financial loss because some cryptos have plunged in value since November last year.
Although the Covid-19 pandemic is receding, Argentina’s government is finding it difficult to get the economy back on track. With a staggering 50% inflation, Argentines are finding everything expensive.
In the meantime, the extreme volatility in the forex market is keeping them away from peso, whose depreciation has been accelerated since 2020.
The International Monitory Fund has reportedly urged the government to impose restrictions on crypto transactions, cautioning that the digital currency could harm the country’s economy further.