Tag Archives | exchange

Using Bitcoin to Get the Dolar Blue Rate in Argentina

One of our more frequent topics is on the “dolar blue” rate in Argentina. This is the unofficial rate at which the US dollar trades in Argentina. Yesterday it hit a new record high of U$S 1 = ARS $9.40. That’s an 81% difference to the official rate and a great reason never to use your credit card or ATM in Argentina.

There are a few ways to take advantage of the dolar blue rate that we have discussed before:

  • Bring US dollars and convert at the blue rate.
    Pros: the best rate available
    Cons: theft, counterfeit bills, finding a cueva to exchange, technically illegal
  • Use a money transfer service like Xoom or Azimo and get a rate close to the blue rate.
    Pros: legal, transfer from your bank account overseas, relatively easy
    Cons: not available in all countries, must physically pick up money, paperwork required, rate good but lower than blue rate

A new method has emerged as well using the relatively new digital currency, Bitcoin. Bitcoin is a decentralized currency and payment system that is not under any government control. Check out the video below for a more detailed overview (or check out this Bitcoin course for a much more in-depth explanation):

Ok, so now you know that you know what Bitcoin is, how can you use it in Argentina to get the blue rate?

Argentines are not very fond of holding pesos – especially with inflation estimated at 25% – 30% per year. And with government restrictions on purchasing foreign currency or gold, many Argentines see Bitcoin as an investment opportunity that is outside of the government’s control. Unfortunately, the currency controls also make it impossible for Argentines to purchase Bitcoins online with pesos. This is where the trading process comes in. You purchase Bitcoins and then trade them for physical pesos at the blue rate.

Watch this short documentary film, “Bitcoins in Argentina,” for a great overview of the process:

Ok, so now you’re ready to trade Bitcoins, right? There’s a few steps you’ll need to take:

1. Get some Bitcoins
In order to get Bitcoins, you need to set up an account and purchase them. We’ve found Coinbase to be a great site to do this. This may take several days to set up, so don’t wait for the last minute.

2. Find someone to trade with
There are a few methods for finding a trading partner in Argentina – the Bitcoin Argentina Mailing List, LocalBitcoins, Bitcoin Argentina on Facebook, and Bitcoin Meetup. The mailing list seems to be the most active, but LocalBitcoins is growing rapidly. Once you find a trading partner, agree on the rate, pick a spot to meet and trade away!

So, what are the pros and cons of using Bitcoin?
Pros: relatively easy to use, completely anonymous, high exchange rate, works for people from almost any country, no need to carry cash, no paperwork
Cons: relatively new currency with high level of price fluctuation, must find a trading partner, must meet in person for exchange, false bills

The biggest con in my mind is the high number of price fluctuations and crashes that Bitcoin has experienced, however I think this can be somewhat offset as the seller by buying and selling in the same day. The buyer holding the Bitcoins has a lot more exposure to these price fluctuations. As for finding a trustworthy trading partner, a lot of the resources above will let you see what other trading the person has done before, and be sure and count the money before sending your Bitcoins.

Are you ready to start trading? Let us know in the comments if you do and what your experiences have been.

– Thanks to this Reddit post for more info on Bitcoin in Argentina.

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Argentine Peso Dives to 5-1/2-yr Low

Reuters is reporting that the Argentine peso has shrunk to its lowest level against the dollar in 5 1/2 years.  The peso slid 2.39 percent to 3.315/3.320 per U.S. dollar, its lowest point since January 2003. The peso has slid 4.65% this year so far.

So, the American economy tanks and the dollar gets stronger. I don’t understand it, and this is exactly why I’m staying away from the stock and currency market.  I am however, going to the ATM to withdraw some cash and take advantage of this rate.

UPDATE (10/08/08): Just checked it out at the ATM and I got $3.1965 pesos to one U.S. dollar.

UPDATE: Figured I’d post some of the recent rates I’ve been getting. I still get the best rate from my Schwab ATM card.

Schwab:
3/16/09: $3.645
11/4/08: $3.378
10/27/08: $3.254
10/24/08: $3.239
10/12/08: $3.222
9/30/08: $3.117
8/8/08: $3.044

(sorry for the big gap, but the exchange rate is much better now!)

4/20/10: $3.863
5/3/10: $3.873 (daily rate: $3.8855)
5/17/10: $3.891 (daily rate: $3.8965)
7/6/10: $3.928(daily rate: $3.933)
7/19/10: $3.929 (daily rate: $3.9325)

American Express (charges 2.7% foreign transaction fee):
10/26/08: $3.178
10/13/08: $3.156
7/23/10: $3.829 (daily rate: $3.932)

Argentine peso sinks; stocks, bonds extend losses [Reuters]

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