With its volatile currency and dysfunctional banks, the country is the perfect place to experiment with a new digital currency
Dante Castiglione stalked through the doors of a glass-walled office tower on the edge of downtown Buenos Aires, just a few hundred feet from the old port district. In the crowded elevator, he shook his head and muttered under his breath about the stresses of the day and his profession. “I swear, this job can kill me,” he said, his eyes cast downward.
On the 20th floor, he hustled into an impersonal, windowless office and quickly removed the tools of his trade from his backpack and set them on the desk: locked blue cash box, cellphone and clunky Dell laptop with the same yellow smiley-face sticker that he puts on all his electronics. Then he unbuckled the fanny pack from around his waist, which contained the most important part of his business: bricks of $100 bills and 100-peso notes.
This room, rented for the day, was not one of Castiglione’s regular haunts. He mostly drifts among the old cafes in Buenos Aires, where the bow-tie-wearing waiters serve small glasses of seltzer water with each coffee. In his line of business as a money-changer, temporary meeting places are preferred; they make things harder for would-be thieves, whom he has so far avoided. On this Friday in late February, Castiglione had run around the city in his camouflage-patterned sandals, trying to distribute cash to some clients and pick it up from others. Once back in his temporary office, his outdated LG phone alternately chirped, buzzed and sang with incoming text messages and emails.
‘I think I understand economics better than most people because I grew up in Argentina. I’ve seen every single monetary experiment you can imagine. This is the street-smart economics. Not the complex Ph.D. economics.’
Ordinarily, Castiglione would have help. His 18-year-old daughter, Fiona, often deals with customers, but she was about to give birth to her first child. Her twin brother, Marco, who used to make cash runs, was now focusing on school. So Castiglione was alone, his stress evident in the sweat on his forehead and the agitation on his face. When his business partner, who lives in Rosario, Argentina’s third-largest city, called to ask why he hadn’t taken care of one particularly insistent client, Castiglione erupted in frustration.
“If you want it done faster, you pick up the phone and call her yourself,” he growled in Spanish, before switching to another call.
After hanging up, he told me in English: “Everybody wants everything now, and I am just trying to do it. I’m not magical, as people think.”
Magical, no, yet something new all the same. His occupation is one of the world’s oldest, but it remains a conspicuous part of modern life in Argentina: Calle Florida, one of the main streets in downtown Buenos Aires, is crowded day and night with men and women singing out “cambio, cambio, cambio, casa de cambio,” to serve local residents who want to trade volatile pesos for more stable and transportable currencies like the dollar. For Castiglione, however, money-changing means converting pesos and dollars into Bitcoin, a virtual currency, and vice versa.
That afternoon, a plump 48-year-old musician was one of several customers to drop by the rented room. A German customer had paid the musician in Bitcoin for some freelance compositions, and the musician needed to turn them into dollars. Castiglione joked about the corruption of Argentine politics as he peeled off five $100 bills, which he was trading for a little more than 1.5 Bitcoins, and gave them to his client. The musician did not hand over anything in return; before showing up, he had transferred the Bitcoins — in essence, digital tokens that exist only as entries in a digital ledger — from his Bitcoin address to Castiglione’s. Had the German client instead sent euros to a bank in Argentina, the musician would have been required to fill out a form to receive payment and, as a result of the country’s currency controls, sacrificed roughly 30 percent of his earnings to change his euros into pesos. Bitcoin makes it easier to move money the other way too. The day before, the owner of a small manufacturing company bought $20,000 worth of Bitcoin from Castiglione in order to get his money to the United States, where he needed to pay a vendor, a transaction far easier and less expensive than moving funds through Argentine banks.
The last client to visit the office that Friday was Alberto Vega, a stout 37-year-old in a neatly cut suit who heads the Argentine offices of the American Bitcoin company BitPay, whose technology enables merchants to accept Bitcoin payments. Like other BitPay employees — there is a staff of six in Buenos Aires — Vega receives his entire salary in Bitcoin and lives outside the traditional financial system. He orders what he can from websites that accept Bitcoin and goes to Castiglione when he needs cash. On this occasion, he needed 10,000 pesos to pay a roofer who was working on his house.
Commerce of this sort has proved useful enough to Argentines that Castiglione has made a living buying and selling Bitcoin for the last year and a half. “We are trying to give a service,” he said.
That mundane service — harnessing Bitcoin’s workaday utility — is what so excites some investors and entrepreneurs about Argentina. Banks everywhere hold money and move it around; they help make it possible for money to function as both a store of value and a medium of exchange. But thanks in large part to their country’s history of financial instability, a small yet growing number of Argentines are now using Bitcoin instead to fill those roles. They keep the currency in their Bitcoin “wallets,” digital accounts they access with a password, and use its network when they need to send or spend money, because even with Castiglione or one of his competitors serving as middlemen between the traditional economy and the Bitcoin marketplace, Bitcoin can be cheaper and more convenient than Argentina’s financial establishment. In effect, Argentines are conducting an ambitious experiment, one that threatens ultimately to spread to the United States and disrupt some of the most basic services its banks have to offer.
Read more: Can Bitcoin Conquer Argentina?
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