The smallest unit of the Argentinian Peso – Argentinian currency, is now at parity with one Satoshi (Sat) – the smallest unit of Bitcoin.
Argentina is the latest country to witness this, well, unfortunate level of a currency slump. Taking to Reddit, an Argentinian citizen with the username OneMoreJuan brought this to the world’s attention: “I am from Argentina, and the smallest unit of our currency has reached the value of 1 Satoshi (1 Sat). Every FIAT currency in history has failed. Buy Bitcoin.”
One Bitcoin has 100 million Sats. One Argentinian Peso (ARS) has 100 cents, which is now roughly equal to or less than 1 Sat. This illustrates the dramatic depths to which the currency has sunk.
A Chain of Problems Each Triggered by the Last
Several factors have triggered this unfortunate turn of events for the currency. One is the central bank’s overzealous response to the economic crisis exacerbated by the current Corona pandemic. The bank has resorted to printing more money to meet shortages, which in turn has caused too much money to flood the economy, causing massive inflation.
Another trigger is the government’s own policies, which include limits on currency conversions, stifling regulations for finance players, and high fees -factors that have rendered it even impossible for the Peso to be tradable with the US Dollar. Instead, the country is now using an unofficial rate – the ‘blue dollar.’ At the time of writing, the blue dollar is sitting at 119 ARS to the US Dollar.
Using this rate, the price of one Bitcoin in the unofficial market is roughly $1,050,000 ARS, while the official going price is $650,000. Thus, 0.01 ARS is equal to around 1 Sat.
Bad to Worse
The latest events are happening in the backdrop of a recession that began in 2018. Now, after the pandemic crisis, inflation has skyrocketed to 50% – a factor that’s also pushing more Argentinians to purchase Bitcoin.
A Pinch Felt by Many
Argentina isn’t the only country whose economy is fighting to stay above the water. The Lebanese Lira recently tumbled to new lows, with one Lira acquiring the value 1 Satoshi. The Vietnamese Dong had it even worse. One Dong has been less than the value of one-millionth of Bitcoin for a while now. Other national currencies whose value is below one Sat are the Sierra Leone Leone, Iranian Rial, the Lao Kip, and more.
With this ominous trend, what’s the future of other somewhat unstable currencies, especially with a global pandemic that’s shown no sign of abating? This remains to be seen.