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Argentine cryptocurrency founders are teaming up to build a Blockchain Valley in Buenos Aires
The movement wants to take advantage of President Milei’s favorable view towards cryptocurrency.
Argentina’s grassroots crypto community is working to create a “Blockchain Valley” in the nation’s capital.
The movement, called “Crecimiento,” which means growth in Spanish, has so far amassed a small following of 500 people, but the group includes the biggest names in Argentina’s crypto ecosystem: Diego Guitérrez, co-founder of Bitcoin Layer 2 RootstockElian Alvarez, general partner of Ripio Ventures, and Marcelo Cavazzoli, CEO and co-founder of one of Latin America’s leading cryptocurrency purchasing apps, Lemon cashamong many others.
Most importantly, according to Crecimiento’s core team, they have the support of advisors to the nation’s new libertarian president, Javier Milei.
“What is happening in Argentina is a unique opportunity,” he says San CristobalCo-founder of So lowan Argentine crypto education platform and member of Crecimiento.
Three worthy goals
Crecimiento wants to create a haven for cryptocurrency and tech founders in Buenos Aires with a high three-pillar vision.
The goal is to attract between 5 and 10 million people to the chain with “great products,” make Argentina’s tech startup ecosystem ten times larger, and give the nation’s startups decades-long stability through favorable regulatory frameworks.
The organization’s goal is to coordinate with Argentina’s new cryptocurrency-friendly government to provide incentives to the cryptocurrency industry, including tax breaks, financing, and a more streamlined business process.
During his presidential campaign, Javier Milei several times advertised the benefits of Bitcoin for financial freedom, although he has yet to make any official statements since taking office. Nonetheless, the Crecimiento movement said it has held several promising meetings with top representatives and key decision makers in the national government, who apparently warmed to the idea of creating a crypto-friendly economic zone in the nation’s capital.
“The regulators have been very receptive,” said María Milagros Santamaría, a lawyer and Web3 consultant who is part of the core team behind Crecimiento’s Sandbox and Economic Zone working group. The authorities, however, are aiming for “concrete proposals” and not the hopeful ideas that often characterize crypto projects.
While some regulators remain skeptical about cryptocurrencies, authorities are very 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 studies, while double-digit inflation continues to plague the nation and foreign direct investment has stagnated for decades. Tax rates are between 25 and 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 free trading of the Argentine Peso Rate (ARS), make it difficult to import, export, or perform any type of international transaction. Argentina’s black market rate has increased 240% to 1,200 ARS per US 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 has generated a huge amount of talent in the cryptocurrency field, which now, together with a seemingly favorable regulatory environment, is what we are trying to build on,” Cristóbal told The Defiant.
In Argentina, Web3 adoption rates vary around 2 million, or 5% of the population. Some of the most notable crypto projects are based in Argentina, including OpenZepellin and Decentralized. With wallets like Muun, everyday Argentines are accustomed to paying and saving in cryptocurrencies for everyday purchases.
The local currency’s degree of volatility, 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 to foster local crypto ecosystems, where efforts have come from the top down, such as in El Salvador, Argentina, cryptocurrency adoption is already present, so the hub has a real chance to grow bottom up.
Although Milei has not explicitly made any statements in favor of cryptocurrencies, the government has taken some steps in that direction. At the end of December 2023, authorized by the Argentine authorities the use of Bitcoin or other cryptocurrencies to settle contractual agreements.
Argentina’s GDP of $631 billion comes primarily from the services sector. A successful cryptoeconomic zone could help diversify the country’s economy and curb it brain drain which afflicts the country after years of economic mismanagement by Peronist governments.
Private funding has arrived
Behind the scenes, helping to drive the initiative, is a private technology incubator Protocol laboratories. The company supports some of the biggest names in cryptocurrency, including Consensys, Starkware, Celestia, Unstoppable Domains, and dozens more.
James Tunningley, ecosystem architect for Protocol Labs, told The Defiant that Argentina simply has one of the best candidates – for better or worse – for this type of experiment.
He went on to explain that his company wants to support startups in their early, mid and late stages; all with different degrees of capital, depending on the stage of the startup. Much like YCombinator, the popular Silicon Valley-based tech incubator, Protocol Labs seeks to add its expertise and deploy capital across the ecosystem.
“Our approach is also very long-term,” Tunningley said. “This is not a plug-and-play, exit situation; We’re here for the long haul.”
According to Tunningley, today also marks the official start of raising capital for the movement to come to life.
“We are looking at a minimum of $2.5 million or $3 million to get this off the ground with a solid chance of success,” he told The Defiant, adding that they are using similar cryptocentric experiments like Zuzalu Citywhich 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 vision.
But in the short term, the team is preparing to have a “pop-up” city in Buenos Aires in August. The goal is to build a temporary place where crypto builders can meet, collaborate, and take a look at what a “crypto economic zone” can look like.
“We will try a crypto city,” Cristóbal explained, “trying out ideas of financial freedom and watching the community come together.”
The pop-up cities and technology hub that Crecimiento wants to build are not something new. In various forms and in different corners of the globe, cryptocurrency enthusiasts have set out to create cryptoeconomic zones from scratch. Thrives in HondurasLa Union in El Salvador and Miami’s crypto-friendly mayor, Francis Suarez, have made bids for a digital asset future in the city.
The concept of “Crypto City” was also espoused by Vitalik Buterin in a blog post in October 2021.
Crecimiento aims to attract as many builders, enthusiasts and investors as possible to the pop-up city in August.
Subsequently, in September, the aim will be to set up funding and support structures for founders, including a two-year coworking hub for 300 people, bootcamps and accelerators.
Other cases of technology hubs around the world
These types of tech and founder-friendly spaces are being created all over the world, as is the case with Swiss tech hub Crypto Valley Zug, Dubai’s Silicon Oasis, and Malaysia’s Digital Innovation Zone, to name just a few of the many examples.
The Swiss Crypto Valley of Zug has proven to be an attractive home for several big-name projects, including digital asset neobank, Xapo, the Tezos Foundation and decentralized exchange Shapeshift. While Dubai has yet to spawn a notable cryptocurrency company, it has become a major nesting ground for large tech companies like IBM and NVIDIA, bringing with it major investment and human capital to the area.
The pieces are taking shape for a Crypto Silicon Valley along the La Plata River. It will now depend on the Argentine blockchain industry to continue 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 cryptocurrencies.