Argentina has been national news with the latest signing of a local soccer player with cryptocurrency. São Paulo is one of the biggest soccer teams in Brazil and they just bought a player with cryptocurrencies.
São Paulo, with the help of USDC, a stablecoin pegged to the US dollar, signed the player from the Argentine team Banfield. USDC is issued by US-based Circle Internet Financial.
The transfer of midfielder Giuliano Galoppo from Athletic Club de Banfield to São Paulo Futebol Clube was made with the help of a stablecoin.
This transaction exceeded US$6 million to US$8 million, linked to the volatile nature of the exchange rate in relation to the Argentine peso.
This transfer was made with the help of a collaboration with Bitso, the cryptocurrency exchange of Mexican origin. Bitso is one of the largest cryptocurrency exchanges in South America.
This news comes amid economic restrictions in Argentina due to an economic crisis.
Cryptocurrency volatility remains a problem
At the moment, Argentina is going through an economic crisis that has also affected the Argentine sports club. This news is positive as it marks the first encrypted signature of a football player.
Thales Freitas, director of Bitso in Brazil, said:
We are very proud to work with these two clubs in this historic transfer to São Paulo with all the security, transparency and flexibility that the crypto economy offers.
This transfer was carried out successfully, however, there are some aspects that must be considered about this agreement. The current difference between pesos and dollars widens and widens.
This could create a situation where players signed by international teams can renegotiate contracts to adjust their salaries.
As volatility can create a problem, the constant readjustment of salaries will be an unavoidable circumstance.
Additionally, Argentina’s unstable economy has helped with the adoption of cryptocurrencies, specifically stablecoins. The inclination towards the use of stablecoins has skyrocketed following the surprise resignation of the Argentine Economy Minister. The resignation took place at the beginning of July.
Related Reading | English Football FA has published plans for a new NFT platform
An attempt to circumvent strict currency restrictions
The transaction could be seen as an attempt to circumvent the country’s restrictive currency restrictions. Under current rules, exports must convert newly purchased US dollars into the local currency of Argentine pesos within five days.
The rate is 131 pesos per dollar. Going through the informal market, the exchange rate is almost 300 pesos per dollar. The currency restrictions imposed by the Central Bank of Argentina do not refer to cryptocurrencies. The crypto transaction, however, will still be subject to regulation.
Sources from the Argentine Central Bank specified that the transfer of Galoppo is an export operation. Because of this, it is mandatory for Banfield to settle its USDC in the local currency, pesos, with the help of the official foreign exchange market.