La Rioja, an Argentine province, has introduced its own quasi-currency, the Debt Cancellation Bond (BOCADE), or “chachos.” This move is a reaction to the economic crisis sparked by President Javier Milei’s austerity measures.
What Happened: La Rioja’s “chachos” can be used for purchases within the province, and to pay provincial taxes and public services. Bloomberg reported that the chachos were in response to a deep recession that the province experienced in February after Milei stopped monthly cash transfers from the federal government to the provinces.
The provincial government cited the national government’s failure to send due funds, devaluation, austerity measures, and a deep crisis as reasons for issuing the quasi-currency, as per a Buenos Aires Herald report in July.
State workers in La Rioja were the first to receive “chachos” as part of their salaries.
Argentina has a history of issuing quasi-currencies during economic crises, with the last instance being in 2002. As per Bloomberg, some are apprehensive about this new currency as previous local-currency experiments and handout schemes have largely failed.
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Despite the economic turmoil, Tesla CEO Elon Musk recently praised Milei, stating that he is doing an “incredible job restoring Argentina to greatness.” Milei has criticized La Rioja’s measure, stating that quasi-currencies are a “scam.”
Why It Matters: Milei has been a vocal advocate for Bitcoin BTC/USD and other digital currencies, aiming to foster a free market approach. His commitment to abolishing export taxes, as part of his fiscal plans, has been met with frustration due to the slow pace of reform, particularly from the farming sector, a key pillar of the Argentine economy.
His budget-balancing efforts also hit a roadblock when the Senate approved an increase in pension spending, potentially derailing his fiscal plans.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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