The movement wants to take advantage of President Milei’s favorable view toward cryptocurrency.
Argentina’s grassroots crypto community is working to establish a “Blockchain Valley” in the nation’s capital.
The movement, called “Crecimiento,” which means growth in Spanish, has amassed a so far small following of 500, but the group includes the most prominent names in Argentina’s crypto ecosystem: Diego Guitérrez, Co-founder of Bitcoin Layer 2 Rootstock, Elian Alvarez, General Partner of Ripio Ventures, and Marcelo Cavazzoli, CEO and Co-founder of one of Latin America’s top crypto buying apps, Lemon Cash, among many others.
Most importantly, they have backing from advisors to the nation’s new libertarian president, Javier Milei, according to Crecimiento’s core team.
“What’s happening in Argentina is a unique opportunity,” says Santi Cristóbal, Co-founder of Solow, an Argentinean crypto education platform and Crecimiento member.
Three Worthy Goals
Crecimiento wants to establish a haven for crypto and tech founders in Buenos Aires with a lofty three-pillared vision.
It aims to lure between 5 million and 10 million people on-chain with “great products,” make Argentina’s tech startup ecosystem ten times larger, and give the nation’s startups multi-decade stability through favorable regulatory frameworks.
The goal of the organization is to coordinate with Argentina’s new crypto-friendly government to provide incentives for the crypto industry, including tax breaks, funding, and a more streamlined business process.
During his presidential campaign, Javier Milei repeatedly touted the benefits of Bitcoin to financial freedom, although he has yet to make any official statements since he took office. Nonetheless, the Crecimiento movement has stated that it has held several promising meetings with top representatives and key decision-makers from the national government, who have apparently been warming to the idea of creating a crypto-friendly economic zone in the nation’s capital.
“Regulators have been very receptive,” said María Milagros Santamaría, a Web3 lawyer and consultant who forms part of the core team behind the Sandbox and Economic Zone working group of Crecimiento. Authorities are aiming for “concrete proposals,” however, and not the hopium ideas that oftentimes characterize crypto projects.
While some regulators continue to be skeptical about crypto, authorities are very much interested in tangible ideas, Santamaria said.
Argentina’s Devastated Economy
Crecimiento’s arrival in Argentina is a welcome change, considering the nation’s dismal economy.
People living below the poverty line exceed 55%, according to a recent study, as double-digit inflation continues to plague the nation, and foreign direct investment has been stagnant for decades. Tax rates are anywhere between 25-35%, and a byzantine bureaucratic system means it can take up to two months to start a business.
Importantly, currency controls, which limit access to foreign currency and prevent the Argentine peso (ARS) rate from trading freely, make it difficult to import, export, or perform any sort of international transaction. Argentina’s black market rate has soared 240% to 1,200 ARS per U.S. dollar since May 2023, which is 20% higher than the official peso rate.
But for Crecimiento, years of a crumbling economy have left a silver lining.
“Our destabilized macroeconomic situation spawned an enormous amount of crypto talent, which now, coupled with a supposedly favorable regulatory environment, is what we’re trying to build on,” Cristóbal told The Defiant.
In Argentina, Web3 adoption rates range around the 2 million mark or 5% of the population. Some of the most prominent crypto projects are based in Argentina, including OpenZepellin and Decentraland. With wallets like Muun, everyday Argentines are used to paying and saving in crypto for everyday purchases.
The degree of volatility in the local currency, historic distrust in institutions, and a large pool of creative and development talent produce the perfect storm to make Argentina an ideal crypto hub. Unlike other attempts at fostering local crypto ecosystems, where the efforts have come from the top down, such as in El Salvador, in Argentina, crypto adoption is already there, so the hub has a real chance to grow from the bottom up.
Though Milei has not explicitly made any statements in favor of crypto, the government has made a few moves in that direction. In late Dec. 2023, authorities in Argentina authorized the use of Bitcoin or other cryptocurrencies to settle contractual agreements.
Argentina’s GDP of $631 billion comes mainly from the services industry. A successful crypto economic zone could help diversify the country’s economy as well as curb the brain drain that’s been plaguing the country after years of economic mismanagement from Peronist governments.
Private Funding Has Arrived
Behind the scenes, and helping to spearhead the initiative, is private tech incubator Protocol Labs. The firm supports some of the biggest names in crypto, including Consensys, Starkware, Celestia, Unstoppable Domains, and dozens more.
James Tunningley, ecosystem architect for Protocol Labs, told The Defiant that Argentina has simply one of the best candidates – for good or worse – for this type of experiment.
He went on to explain that his firm wants to support startups in early, middle, and late stages; all with varying degrees of capital, depending on the startup’s stage. Much like YCombinator, the famed Silicon Valley based tech incubator, Protocol Labs looks to add its expertise and deploy capital across the ecosystem.
“Our approach is one of a very long time horizon as well,” Tunningley said. “This isn’t a plug-and-play and get out sort of situation; we’re in it for the long haul.”
According to Tunningley, today also marks the official start of raising capital for the movement to come to life.
“We’re looking at a minimum of $2.5 million to $3 million to get it off the ground with a solid chance of success,” he told The Defiant, adding that they are using as a benchmark similar crypto-centric experiments like Zuzalu city, which created the first pop up city in Montenegro in 2023.
Pop Up City in Buenos Aires
Crecimiento is a long-term project with a long-term view.
But in the short term, the team is preparing to have a “pop-up” city in Buenos Aires during the month of August. The goal is to build out a temporary location for crypto builders to come together, collaborate and get a glimpse at what a “crypto economic zone” can look like.
“We’re going to test out a crypto city,” explained Cristóbal, “trying out ideas of financial freedom, and watch the community come together.”
Pop-up cities, and the tech hub that Crecimiento wants to build out isn’t something new. In varying forms and in different corners of the globe, crypto enthusiasts have been bidding to create crypto economic zones from scratch. Prospera in Honduras, La Union in El Salvador, and Miami’s crypto-friendly mayor, Francis Suarez, have also been bidding for a digital asset future in the city.
The concept of “Crypto Cities” was also espoused by Vitalik Buterin in a blog post in Oct. 2021.
Crecimiento is aiming to bring on as many builders, enthusiasts, and investors as possible to the pop-up city in August.
Next up, in September, the aim will be to establish funding and support structures for founders, including a two year-long co-working hub for 300 people, bootcamps and accelerators.
Other Cases Of Tech Hubs Around The World
These sorts of tech and founder-friendly spaces are getting created all around the world, as is the case with Switzerland’s tech hub Crypto Valley Zug, Dubai’s Silicon Oasis, and the Digital Innovation Zone in Malaysia as a few of the many examples.
Switzerland’s Crypto Valley Zug has proven to be an attractive homeland for several big name projects, including digital asset neobank, Xapo, the Tezos Foundation, and decentralized exchange, Shapeshift. Even though Dubai is yet to spawn a notable crypto company, it has become an important nesting ground for big tech corporations like IBM, and NVIDIA, bringing with them important investments, and human capital to the area.
The pieces are coming into place for a Crypto Silicon Valley along the La Plata River. It will now depend on Argentina’s blockchain industry to keep pushing the movement and on the government to support its growth. If nothing else, Milei’s favorite saying, “Long live freedom, damn it,” should bode well for crypto.
