Dollarization (or more precisely, free currency competition) was at the heart of the economic proposal that propelled Javier Millay to the position of president of Argentina in the November 2023 elections.
Two and a half years later, Argentine peso remains legal tender. And the explanation the president himself gave in a televised interview on April 8, 2026 is shocking. “Do you know what the main problem is that we can’t dollarize? “People don’t want dollarization,” he said.
Millay added: “We proposed endogenous dollarization, which means you can trade in dollars if you want, but people don’t do it. “We’ve allowed for financial innocence, but people don’t do it.”
The Tax Innocence Act, regulated in February 2026, restored the presumption of innocence in tax matters and allowed transactions in dollars without legal repercussions. Millay says the door is already open. However, Argentines continue to choose the peso in their daily activities. And that decision is a sovereign one for the president.
Strictly speaking, you can’t force things on people. And if you give him the option to use dollars and he continues to use pesos, OK…let people trade in whatever currency they want.
President Javier Millay of Argentina.
Asked whether dollarization had protected economic planning from disruption, Millais admitted: There are technical obstacles: lack of reserves, unpreparedness of the financial system, etc. But he presented them as secondary.
“That’s an interesting point, but it’s a secondary issue,” he says. Most importantly, he argued, society does not want dollarization.
In addition to talking about dollarization, Millay revealed in the interview that: His government will continue to focus on beating inflation.. “The chainsaws are still working. Central banks must continue tight monetary policy until inflation is brought under control. “We will not give an inch,” he asserted.
president Rejected the idea of accepting more inflation in exchange for increased economic activity. “Under reasonable expectations, the only way you can influence the level of economic activity is to deceive your agents. “You’re asking me to lie and steal from you, because inflation is also theft.”
In this framework, dollarization remains an option available to those who wish to use it. It is not a policy enforced by the state.
What if the explanation is Gresham’s law?
but, There may be a classical economic explanation that subtly changes the reading of the president.
gresham’s law – Stated in the 16th century and summed up in the saying, “Bad money gives way to good” – They argue that when two currencies circulate in parallel, people tend to use the weaker one and hoard the stronger one.
In other words, the fact that Argentines use pesos in their daily transactions does not necessarily mean that they prefer them, but rather that Argentina was the first to get rid of them and that is why they circulate in the domestic economy. This is similar to what happens to people who have Bitcoin (BTC) and prefer to save it instead of spending it.
Under this logic, another question Milay’s statement leaves open will be another question as long as the central bank continues to print pesos. There will be a large amount of domestic currency that people will want to spend before it loses value.
From that point of view, The peso circulates not because it was chosen, but because it is “flammable.” Meanwhile, dollars are saved. The fact that people don’t dollarize their transactions could be evidence that they value the dollar too much to spend on it.
(Tag Translate) Argentina
