New York Times recently issued a piece covering bitcoin’s unique place in Argentina, a country wracked by hyperinflation and capital controls as well as vultures wrangling over sovereign debts and defaults.

They follow a “moneychanger” of bitcoin, through the times, the highs and the lows as well as venture funds tied to Argentina. You can see the use cases in a currency where fiat has come close to mere toilet paper, as well as the financial proximity to Venezuela where toilet paper has become indeed valuable.

It starts from Argentina, and briefly dances in Silicon Valley (and then New York with the obligatory banking response) before returning to see how developments are taking place in a country where decentralized banking systems without banks make pragmatic instant sense.

It can be a long read, but it is a glimpse into an effective use case of a country:


For Castiglione, however, money-changing means converting pesos and dollars into Bitcoin, a virtual currency, and vice versa.

Had the German client instead sent euros to a bank in Argentina, the musician would have been required to fill out a form to receive payment and, as a result of the country’s currency controls, sacrificed roughly 30 percent of his earnings to change his euros into pesos.

In March 2013 Casares attended an exclusive technology conference near Tucson hosted by the investment bank Allen & Company. At dinner the first night, Casares won the attention of a table full of investors by describing his childhood experiences in Argentina and how Bitcoin equipped people to avoid similar situations. He demonstrated the capabilities of the Bitcoin network by sending $250,000 worth of the virtual currency to the phone of a table mate, who was then directed to pass the money along to the man next to him with no more than a few taps of his iPhone keypad.

The Rock Hostel is one of hundreds of hotels in the country using the Argentine start-up BitPagos to collect credit-card payments from foreign customers. If Rodriguez Pons accepted credit-card payments from American customers through the usual financial channels, customers would be billed in dollars, and when those dollars came to Rodriguez Pons’s Argentine bank account, they would be converted at the official rate, about 30 percent lower than the black-market rate. It would also take 20 days for Rodriguez Pons to get her pesos. BitPagos helped counter these drawbacks by taking the credit-card payment in the United States and then using the dollars to buy Bitcoins, generally from Coinbase, before sending them to Rodriguez Pons immediately. When Rodriguez Pons needed to pay the rent or laundry bills, she called Fernández or Castiglione — her two standbys — to sell the Bitcoins for pesos at a rate close to the dólar blue. Rodriguez Pons saved so much money this way that she could offer the 10 percent discount for credit cards and still easily come out ahead


When I asked Castiglione what he thought about a global venture like Xapo, he evinced a workingman’s skepticism. “We might not be as big as Wences, but the real thing happens here,” Castiglione said, as we sat in his temporary office between client visits. “People get the cash to spend.”