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In practice, coin competition is already happening, says Milei.
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In order to close the BCRA, it is first necessary to clean it up.
Javier Milei, current president of Argentina, came to power making unusual promises.
Among them was the establishment of a regime of free currency competition (popularly referred to as “dollarization”) and the closure of the Central Bank (BCRA).
As reported by NoticiasVE, in November of last year, a few days after being elected to the presidency, Milei assured that “the closure of the BCRA is not negotiable.”
But, almost a year having passed since December 10, 2023, the day Milei assumed the presidency, The BCRA continues to function and the Argentine currency continues to be the peso.
What happened? Are those promises left behind? Is there now a better alternative?
In dialogue with the Russian-American computer scientist, Lex Fridman, Milei explained why these campaign promises have not yet materialized.
First of all, the Argentine president reiterated what his proposal consists of:
«If you review all my statements, I talk about currency competition. I’m not talking strictly about dollarization, I’m talking about currency competition and eliminating the Central Bank. If later people decide to embrace the dollar, it is a people’s problem.
Javier Milei, president of Argentina
NoticiasVE has explained that in this free competition of bitcoin (BTC) currencies and cryptocurrencies could come into play.
On the issue of currency competition, Milei maintains that, in practice, it is already happening. “If you today in Argentina want to make transactions in any currency, you can do it, it is allowed,” he said and added “that is, there is already currency competition.”
On the other hand, Milei clarified that before thinking about closing the Central Bank it is necessary to clean it up.
«We had to face the problem of the SIRA, the commercial debt of the Central Bank of 50,000 million dollars. We still have to resolve the problem of dividends for 10,000 million. And in the middle we cleaned up the Central Bank’s balance sheet for 45,000 million. That is, you cannot close the Central Bank if it is bankrupt, because in reality you need to rescue all that debt from the Central Bank, which is the monetary issue and the remunerated liabilities. We finish with paid liabilities; “We have the monetary base left.”
Javier Milei, president of Argentina
The president adds: «today we have a regime where the amount of money is fixed, the broad monetary base does not grow. And to the extent that the demand for money grows, since they can use dollars, they do not need to go and sell the dollars and make the peso appreciate. “They can make transactions in dollars.”
Then, Milei projects that, “as the economy grows, there will be a greater proportion of dollars to pesos.” He culminates his idea by anticipating: “At one point, the amount of pesos compared to dollars is going to be so relatively small that closing the Central Bank is going to be a matter of a snap of the fingers.”
As additional information, the president of Argentina comments that there was a proposal to dollarize more quickly, but that it was not possible to carry it out for political reasons:
«If you give me the money, right now I go and dollarize, I have no problem. For example, I had a proposal to do it and it would have worked, because the bonds—let’s say, the largest creditor of the National Treasury is the Central Bank—were quoted at 20 cents. If I had sold those securities for 20 cents – and today they are trading between 60 and 70 – with a group of Neanderthals who are part of the opposition, who in addition to being economic brutes are malicious, I would be in prison today.
Javier Milei, president of Argentina.