On Wednesday, Argentine lawmaker José Luis Ramón introduced a bill that will allow workers to receive their salaries in Bitcoin.
In his tweet he mentioned,
“I presented a bill so that workers in a dependency relationship and exporters of services have the option of receiving their full or partial salary in cryptocurrencies. The idea is that they can strengthen their autonomy and preserve the purchasing power of their remuneration.”
He explained his reasons further by saying, “This initiative stems from the need to promote greater autonomy and governance of wages, without this implying a loss of rights or exposure to situations of abuse within the framework of the employment relationship.”
As per Acuant, less than 50 percent of the Argentine population has bank accounts, but 78 percent has internet access. Thus, it seems digital currencies have a huge potential of reaching the masses.
Besides possessing digital currency, they will be able to access global financial markets to make investments.
Mr. Ramon’s emphasis on preserving the purchasing power stems from the hyperinflation prevalent in the country. The present inflation rate of the Argentine Peso is approximately 50 percent which means every year its purchasing power is reduced by half.
The official data says that the inflation rate for May was 3.3 percent which cumulatively becomes 21.5 per cent for the year. But the year-on-year inflation rate is 50 percent.
The bill as quoted by newspaper Cronista aims at, “besides strengthening the autonomy of employees and freelancers, offers a modern mechanism to maintain their wage’s purchasing power without implying currency conversion, as the 27.541 Law looks to discourage”.
In 2019, the government mandated that service exporters can convert their income from dollars to Argentine Pesos only through exchange channels authorized by the Argentine Central Bank. The conversion rate offered by these channels is 78 percent lower than the market price.
That’s why many exporters receive their payments in cryptocurrencies and avoid conversion to pesos.
Bitwage, a platform that converts fiat into crypto, witnessed 300 percent growth in monthly transaction volumes in the past year by Argentines. The number of Argentinians registered on the platform also increased by 500 percent.
The proposed bill also reads that the absolute decision on acceptance, revocation, and modification of this type of payment shall lie in the hands of the workers.
Also, it allows the workers to select the cryptocurrencies they wish to be remunerated in.
According to a preview published by Ramón, the bill defines what should be treated as cryptocurrencies and other terms in the crypto market.
If Argentina passes this bill, it will become the second country after El Salvador to recognize cryptocurrencies. Argentina has moved a step ahead of El Salvador by proposing to recognize not just one cryptocurrency, but many.