Argentina’s government is accelerating President Javier Milei’s dollarisation strategy by collaborating with major banks and payment firms to introduce dual-currency debit cards and expand dollar-denominated loans.
The dual-currency debit cards will enable Argentines to make payments directly in dollars, bypassing existing exchange rate controls. Additionally, the government plans to allow banks to offer dollar loans to sectors previously excluded from such financing. These measures aim to leverage the recent influx of over US$20 billion into local banks, resulting from a tax amnesty, and to promote the use of dollars in everyday transactions.
President Milei’s approach, termed “endogenous dollarisation,” focuses on limiting the supply of pesos to encourage the use of dollar holdings for regular expenses. This strategy represents a shift from his initial campaign promise to shut down Argentina’s Central Bank and fully adopt the dollar as the national currency.
The government aims to launch the dual-currency debit cards by early next year, with Economy Minister Luis Caputo targeting a January rollout, though companies involved suggest it might take until March. These initiatives are part of a broader effort to stabilize the peso and integrate dollar usage into the Argentine economy.
As these developments unfold, the government continues to negotiate with the International Monetary Fund (IMF) to restructure its debt and secure additional funds to bolster international reserves and eliminate currency restrictions by 2025.
