Argentina’s economy and startup ecosystem might look frankly chaotic to the casual observer, but the situation is actually governed by countless subtle factors and shades of gray. Against this backdrop, cryptocurrencies are adding a splash of color — and a hint of optimism — to the South American country’s beleaguered funding landscape.
The $57 billion bail out — which is an increase over the originally planned $50 billion — includes a commitment to zero deficit by 2019. But the decision to work with the IMF hasn’t gone down well in Argentina.
But behind this backdrop of financial crisis and turmoil, there is a glint of hope.
Blockchain technology projects and their associated token events have generated more investment in the region than traditional VC funding of late.
AstorGame raised over $11 million in January. Flixxo followed that with a $5 million raise, and Decentraland grabbed $24 million.
These crowdfunding rounds followed the success of Ripio Credit Network, which last year raised $37 million and is one of those rare beasts — a blockchain startup with a working product and hundreds of thousands of users.
While the number of Bitcoin users in Argentina wouldn’t appear on many global league tables, it is one of the few countries where Bitcoin is used by regular consumers for real retail transactions.
The bureaucracy is one challenge many startups can’t rise to — despite the government announcing sweeping reforms intended to improve the situation. These will take a long time to become impactful, and they don’t alter the often prohibitive terms VCs apply to funding deals.
Importantly, as more blockchain technology startups successfully raise funds, the entire ecosystem will be strengthened.
With action from the government, new ways to finance, and many strong founder networks that offer peer support, Argentina looks — from a startup perspective — to be on the rise.