Stablecoin purchases in Argentina shot up over the weekend.
Arbitrage opportunities erupted for stablecoins paired with the country’s national fiat currency – Peso.
The buying pressure increased following economy minister Martin Guzmán’s resignation.
Traders are reportedly hedging against increased inflation rates. Major local exchange Buenbit saw a 300% increase in trading on Sunday.
DAI token was one of the stablecoins targetted by traders.
The news comes as tensions flare up between Argentina’s president and vice president.
CoinDesk reported that stablecoin buys in Argentina grew up to three times the usual transaction volume over the weekend following the resignation of Martin Guzmán, the minister of economy.
According to the report, three prominent local crypto exchanges confirmed the event to Coin Desk. The platforms also surmised that the increased buys could be an attempt by traders and investors to hedge against rising inflation in Argentina.
Financial analysts tagged the country’s year-over-year inflation rate at 60% back in May 2022, per reports.
Digital asset exchange Buenbit also told CoinDesk that trading volume increased by around 300% on Sunday, right after Guzmán stepped down from office on Saturday. The news triggered a drop in Peso’s value by some 15% against stablecoin like DAI and Tether’s USDT.
As such, traders were able to scoop up stable tokens in an arbitrage fashion. Both DAI and USDT spiked as high as ARS 303 over the weekend. An increase also occurred after Silvina Batakis was appointed as Argentina’s latest minister of economy.
Buenbit also noted that DAI was especially popular among traders over the weekend. The report stated that “many people” deployed their DAI bags to secure Peso-denominated loans. Traders then used their arbitraged Pesos to buy more DAI.
Argentina’s Top Officials Fued As Economy Slips Into Crisis
Martin Guzmán’S decision to step down from office comes at a when Argentina’s two top government officials are at loggerheads. Argentine President Alberto Fernandez and the Vice President, Cristina Fernández de Kirchner are supposedly out of sync as regards economic policies.
Apart from rising inflation rates, the Central Bank of Argentina is also short on liquidity for its foreign currency reserves. The apex financial house also limited crypto trading facilities, as EthereumWorldNews reported in May.