In a bid to combat the economic turmoil gripping Argentina, the province of La Rioja has introduced its own quasi-currency, the Debt Cancellation Bond (BOCADE), affectionately nicknamed “chachos.” This unconventional move comes as a direct response to the economic crisis sparked by President Javier Milei’s stringent austerity measures.
The “chachos” can be used for purchases within the province, paying provincial taxes, and settling public service bills. Bloomberg reports that the introduction of this quasi-currency was prompted by a deep recession experienced by La Rioja in February after Milei discontinued monthly cash transfers from the federal government to the provinces.
La Rioja’s provincial government cites the national government’s failure to send promised funds, currency devaluation, austerity measures, and an overall economic crisis as justifications for issuing the “chachos.” State workers in La Rioja were the first to receive their salaries in the new quasi-currency.
Argentina has a history of issuing quasi-currencies during economic crises, with the last instance being in 2002. However, as per Bloomberg, some harbor apprehensions about this new currency, as past local-currency experiments and handout schemes have largely failed to deliver substantial results.
Despite the economic turmoil, Tesla CEO Elon Musk recently expressed his support for Milei, stating that he is doing an “incredible job restoring Argentina to greatness.” Milei, however, has been critical of La Rioja’s measure, labeling it a “scam.”
Milei has been a vocal advocate for Bitcoin and other digital currencies, aiming to establish a free market approach to the Argentine economy. His commitment to abolishing export taxes, a key component of his fiscal plans, has faced frustration due to the slow pace of reform, particularly from the farming sector, a crucial pillar of the Argentine economy.
His budget-balancing efforts also encountered a setback when the Senate approved an increase in pension spending, potentially derailing his fiscal plans. The effectiveness of La Rioja’s “chachos” remains to be seen, as it navigates the complex economic landscape shaped by Milei’s policies and the ongoing struggle for financial stability in Argentina.
