The biggest crypto player in Argentina, Lemon, has unveiled what it describes as the country’s very first Visa credit card with a Bitcoin backing. With this new offering, consumers can easily pay in Argentine pesos without needing to liquidate their Bitcoin holdings.
According to “La Nación”, clients who want the maximum credit limit that can go up to 1 million pesos must first deposit 0.01 Bitcoins as a guarantee which is equivalent to about 960 dollars based on the current market price. The Bitcoin that is deposited will be held as a security deposit and will not be sold or converted into fiat currency.
Lemon has revealed that it will continue to unfold the service with more functionalities gradually over time. Future updates might include the possibility of changing collateral and credit limits as well as being able to make dollar settlements directly through dollar-pegged stablecoins rather than first converting the funds into pesos.
Bitcoin Credit Cards Tap Argentina’s Deep-Rooted Distrust of Banks
This movement is indicative of the Argentine people’s long-held unwillingness to trust institutions that deal with money, a feeling accentuated by the years of depreciation of the peso, the 2001 ”corralito” incident, when the government stopped people from accessing their bank deposits and, in effect, took away their savings, and other similar events. Keeping the cash in US dollars has then been the preferred method of about all families rather than the perishable peso deposits.
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A report by Reuters, which refers to statistical data associated with Argentina’s International Monetary Fund program, makes an assessment that Argentineans have about $271 billion in undeclared cash dollars. The money is either “under mattresses or in foreign bank accounts,” apparently, but still, it is outside the formal financial system.
Such behavior has not changed since President Javier Milei introduced the “Fiscal Innocence” tax amnesty, which led to approximately 300,000 declarations of over $20 billion in assets.
In the future, Lemon will make it possible for the users to borrow against their Bitcoins in the form of local credit. This means that savers are not being forced to liquidate their Precious Metals or dip into their hard currency cash reserves. Rather, their preferred store of value is being transformed into everyday spending power.
