Cointime

Download App
iOS & Android

Currency Union in Latin America: Brazil and Argentina to Launch Common Currency

The governments of Brazil and Argentina will discuss in the next few days the basic guidelines for launching a common currency between the two countries. It would constitute the second largest economic bloc in the world, behind the European Union and its currency, the euro.

According to the Financial Times (FT), the summit where the remaining details of the project will be defined will be held in Buenos Aires during the week of January 23–27. On Sunday evening, January 22, Brazilian President Lula Da Silva will arrive in the country on an official visit.

A possible name for this new currency would be “ sur “. Its main objectives would be to boost trade in the region and reduce the dependence of South America’s two largest economies on the U.S. dollar.

Representatives of other governments from the southern part of the American continent could join not only the meeting in the Argentine capital, but also the currency project. According to FT, a currency union of all Latin America would represent 5% of the world’s gross domestic product (GDP). The European Union, meanwhile, accounts for 14%.

In principle, the currency would coexist with each country’s current currencies, the real and the Argentine peso. Argentine Economy Minister Sergio Massa told the newspaper quoted above that “the necessary parameters for a common currency will be evaluated, which includes everything from fiscal issues to the size of the economy and the role of central banks.”

“I do not want to create false expectations, it is the first step of a long road that Latin America must travel,” the official added. Finally, he clarified that the project may take many years to materialize.

A tool in the face of Argentina’s economic problems

The devaluation of the Argentinean peso and the inflation experienced by the country have been reported on several occasions. In this context, its inhabitants -as well as those living in Venezuela — found in bitcoin (BTC) and other cryptocurrencies a solution to keep their savings safe from these evils.

While people seek access to more stable currencies such as the US dollar, Argentina’s financial crisis has led the government to place more and more restrictions on access to the currency. In response to this, stablecoins have flourished as an alternative.

The creation of a common currency between Brazil and Argentina could address this problem, although the criteria for the issuance of the new currency, its functions and who could access it are unknown. For the time being, this is an issue that will surely have more news in the coming days.

Comments

All Comments

Recommended for you

  • Lido is preparing a blockchain identity verification platform codenamed "Y" to compete with World Network

    According to insiders, Cyber Fund, led by Lido co-founders Konstantin Lomashuk and Vasiliy Shapovalov, is preparing a blockchain identity verification platform codenamed "Y" to directly compete with Sam Altman's World Network. Unlike World Network, which uses iris scanning for identity verification, the Y project will use users' social media and blockchain activity data, combined with Ethereum Attestation Service, to verify their identity. The solution aims to address the risk of biometric data leakage and minimize the potential for fraud.

  • Tether announces upcoming investment in stablecoin company Quantoz Payments

    On November 18th, Tether announced that it will invest in Quantoz Payments to launch EURQ and USDQ electronic currency tokens (EMT) that comply with the MiCAR standard for the euro and the US dollar respectively. Tether has not disclosed the amount of its investment, and Quantoz will use Tether's Hadron asset tokenization platform.

  • U.S. 30-year Treasury yield rises to 4.68%

    30-year US Treasury bond yield rose to 4.68%, the highest level since May 31.

  • NANO LABS announces Bitcoin as its strategic reserve asset

    Nano Labs announced that it will use Bitcoin as its strategic reserve asset.

  • Revolut Launches Staking Feature for Six Cryptocurrencies, Allowing Users to Earn Rewards

    Revolut, a prominent digital bank, has introduced a staking feature that enables users to temporarily lock funds to secure a cryptocurrency's network and earn rewards. The staking process is simple and easy to use, and currently supports six cryptocurrencies: Ethereum, Solana, Polkadot, Cardano, Tezos, and Polygon. The rewards for staking vary depending on the amount of crypto staked and the chosen cryptocurrency, with APYs ranging from 2.09% to 12.30%. However, some cryptocurrencies have lock-up periods before users can access their balances. Revolut users can stake Ethereum and receive their rewards daily after a waiting period of approximately 2 days, but must wait 10 days to access their balance once unstaked. Staking Solana on Revolut offers an APY of 5.25%, with rewards paid every 3 days after an initial waiting period of 3 days. Staking Polygon on Revolut offers an APY of up to 3.74%, with rewards paid daily after a 1-day warm-up period. Revolut staking is available in select countries within the EEA, with fees ranging from 15% to 35% depending on the token and the amount staked.

  • Ethereum Struggles with Institutional Adoption, Losing Ground to Bitcoin

    Ethereum's eight-year support trend against Bitcoin has been broken, causing concern for its future. Tuur Demeester, founder of Adamant Capital, has described Ethereum as "dying a slow death" due to this development. The slow adoption by institutions is being blamed for Ethereum's setback, while Bitcoin continues to dominate. This could have implications for Ethereum's position as an asset class. Despite this, Bitcoin's price remains stable, while altcoins show mixed performance. The disparity between Bitcoin and Ethereum's adoption among institutional investors is due to Bitcoin's simpler use case and fixed supply, as well as its higher trading volumes in ETFs compared to Ethereum. Ethereum's scalability challenges and regulatory scrutiny, particularly regarding its transition to a proof-of-stake model, are also contributing factors. Institutional endorsement of Bitcoin ETFs has outpaced that of Ethereum, with major asset managers like Fidelity and Morgan Stanley adding Bitcoin ETFs to their offerings. Experts suggest that Ethereum needs to address scalability issues and redefine its role as a technology-driven platform to regain its competitive edge. Until then, institutional investment appears to favor Bitcoin.

  • Morgan Stanley expects US interest rate cuts of 75 basis points in the first half of 2025

    Morgan Stanley predicts that by mid-2025, the yield on 10-year US Treasury bonds will fall to 3.75%, and by the end of next year it will fall to slightly above 3.50%. It is expected that the US will cut interest rates by 75 basis points in the first half of 2025.

  • Vitalik: Hope to see more EVM Rollups to improve data efficiency

    Vitalik Buterin, co-founder of Ethereum, wrote on the X platform that part of the L2 expansion is for Ethereum to increase its blob capacity, and the other part is for Rollups to become more data-efficient. It is great to see Starknet rise to the challenge and hope to see more EVM Rollups improve data efficiency. Earlier, Starknet announced the release of the solution Starknet v0.13.3, which aims to meet the stable growth of Ethereum blob processing needs.

  • Musk: I still hold a lot of Dogecoin, and SpaceX holds a lot of Bitcoin

    On November 18th, Dogecoin UI designer DogeDesigner shared an audio clip of Musk saying "I still hold a lot of Dogecoin, and SpaceX holds a lot of Bitcoin."

  • Project Liberty Announces "Deep Partnership" with SOAR.com, Founded by Ancestry Founder Paul Allen

    Project Liberty has announced a "deep partnership" with SOAR.com, a series of AI-powered data sharing and social networking portals created by Paul Allen, the founder of Ancestry. Allen previously built a family social networking app on top of Facebook that attracted 120 million users. Project Liberty claims to be the leading bidder for the U.S. assets of TikTok if they become available. Bitcoin ETFs have recorded the third-highest day of outflows, while the funding for Web3 games is stabilizing at $1 billion in 2024. Meanwhile, Bitcoin has topped its lifetime high of $93,000 as U.S. demand surges, and experts suggest that President Trump could establish a U.S. strategic Bitcoin reserve.