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Strike Launches In Argentina, The 3rd Country In Which The Service Is Available

Strike, Jack Mallers screenshot
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Good omen for Argentina. Strike, the financial app that runs on the Bitcoin rails, has officially launched in the country. Argentina joins the United States and El Salvador, becoming the third market in which the service is available. The previous country that launched its Strike ended up legally bidding for Bitcoin, but let’s not get ahead of ourselves.

Related reading | Jack Mallers teaches the IMF about bitcoin using tortilla chips and peanuts

According to Jack Mallers, CEO of Strike, Argentina is “a country facing hyperinflation, unfair payment networks, and unusable cross-border remittances”. According to an article by November 2021 in the Buenos Aires TimesInflation over the past 12 months is now at 52.1 percent, according to official data – one of the highest in the world.

Not only that, according to Muellers, “GDP will shrink by 12% this year” and “half of the population is already living in poverty.” And then, there’s Argentina’s recent economic history. Like the Corralito incident in 2001, where the government froze all bank accounts and limited cash withdrawals to 250 pesos per week, to prevent capital flight.

Since then, practically the whole country does not trust its currency and prefers to save with dollars. Argentines have historically fled to the dollar. An estimated 10%+ of the world’s physical stock of dollars is in the Argentine financial system.”

BTC price chart for 01/12/2022 on Coinbase | Source: BTC/USD on TradingView.com

Argentina’s current situation and what the strike brings to the negotiating table

Nowadays, the situation has become such that it has “forced the government to devalue its currency, impose limits on the amount of foreign currency that citizens can hold, and shut down dollar-denominated payment networks”. Not only that, and to keep the exchange rate low, the government implemented “Impuesto País”. Huge 30% margins on most dollar-denominated transactions.

This, as always, gave rise to the black market. Or, in the words of Jack Mallers, “dollars are now twice the official rate in the parallel market and have generated other means of payment to facilitate transactions between different currencies, peers, companies and countries.”

This is where Strike comes in. With the app, “Argentine people can now maintain a stable cash balance that can be spent instantly and without fees.” And all of this is powered by the Lightning Network as rails. This means Bitcoin, “the best monetary asset and the best cash network in human history.”

Jack Mallers at CNBC’s lunch party

To kick off the interview, host Kelly Evans asks Mallers if he thinks the Argentine government will be as receptive as El Salvador. Strike’s CEO quickly lowers expectations and says he’s not a government advisor, he’s just there to serve up his app. “We give the people of Argentina a cash asset, a monetary policy, and a cash network that they can rely on and make free and instant payments across borders,” says Maller.

Mallers says Argentina’s economy is cash-based, and that’s only true with respect to the US dollar. And what services does Strike provide, then? “What we allow you to do is hold a dollar-like cash collateral, but then use the Bitcoin network under the hood to lock in value to deliver seamless digital payments, and relieve them of this really brutal cash economy.”

Related reading | Attention developers Lightning! HRF and Strike 3 mode rewards of 1 BTC each

Toward the end, Evans frankly asked him, “Is Venezuela next?” Muellers get out of the bargaining zone easily. “Everywhere is next for us,” he says. “The good thing about Strike is that we sell them money, not ads. We offer one of the most widespread products in human history, and that is money.”

As Evans rightly remembers, Strike took off in El Salvador and became very successful first. Then the government started paying attention. You can count on Bitcoinist to let you know how Argentine people react to Strike and the level of success of the app. It’s not foolproof, but it can become a very important story. Let’s see what the future holds.

Featured Image: Jack Mallers screenshot from this video | Charts by TradingView

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