US Treasury Buys Argentine Pesos Worth $20B, Crypto Analysts React

Scott Bessent, the US Treasury Secretary, confirmed buying Argentine pesos. His October 10th X Post stated “today we directly purchased Argentine pesos”. This decision got a mixed response from market experts and crypto analysts.

The $20 billion currency swap with Argentina is a rare intervention to stabilize the South American nation’s financial markets. The Treasury Secretary shared details regarding this deal after four days of negotiation with Luis Caputo, the Argentine Economy Minister.

Several reputable news outlets reported this incident as the US rescuing Argentina’s economy. This intervention clearly aims to bolster the Argentine peso and support the Argentine President’s reform agenda.

The US Treasury Finalized $20B Currency Swap with BCRA

The USA finalized a $20 billion currency swap with Argentina’s central bank (BCRA) on Thursday. It bought Argentine pesos in a move to stabilize the Latin American nation’s finances.

The US Treasury made this decision after four days of meetings with the South American country’s economic team. Bessent shared: “The U.S. Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets.”

The decision to rescue the Argentine Economy was made after intense meetings took place in Washington, during Luis Caputo’s visit. Both parties sought to ease a severe liquidity crunch that had driven the peso down and weighed heavily on Argentine bond prices.

Although this US Treasury move is technically not a bailout, it appears politically and symbolically to be one. Officials called this arrangement a “Swap”, as the Treasury bought pesos. Argentina might eventually settle the swap or repurchase those pesos to show that it’s not a one-way rescue.

The Argentine Minister of Economy Expressed His “Deepest Gratitude”

Although it took four days of negotiation, Caputo thanked the Treasury Secretary Bessent in his X post. He stated, “Please allow me to convey my deepest gratitude for your unwavering support to Argentina.”

The Argentine minister further stated that he eagerly anticipates their upcoming meeting, where both countries’ teams will continue to collaborate with the same spirit.

Even though Caputo has praised the US Treasury for supporting the Argentine economy, the US Senators from both parties have criticized this move. Eight senators introduced the “No Argentina Bailout Act” to prevent the Treasury’s attempt to bail out Argentine financial markets.

The Republican Senator Chuck Grassley also opposed the US Treasury’s decision to buy the Latin American nation’s currency. In his opinion, the USA should not bail out Argentina as the South American nation takes the US soybean producers’ biggest market.

Crypto Community Responded

The US Treasury’s decision to swap USD for Argentine peso didn’t just bring criticism from the political sector. Renowned analysts from the crypto sector also criticized Bessent for not investing in Bitcoin.

Quinten Francois criticized this move, stating, “You are still early.” Another expert shared that the US has added $20 billion of worthless Argentine fiat. The crypto community appears to be clearly disappointed, as investing in BTC could have provided another boost to the crypto giant’s market value.