Latam Insights — Argentina to Complete IMF Payment With Chinese Yuan, Bolivia Also Using China’s Currency for International Settlements
Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue, Argentina is likely to settle part of a payment to the International Monetary Fund (IMF) using the Chinese yuan, Bolivia is already making payments using the Chinese yuan, and Sazmining announced the launch of mining operations in Paraguay.
Argentina to Complete IMF Payments With Chinese Yuan
The government of Argentina will complete part of a disbursement to the International Monetary Fund (IMF) using the Chinese yuan. According to sources linked to Economy Minister Sergio Massa, the $3.4 billion that must be settled this July will be made using “CAF funds, with yuan, and other sources of financing.”
The Argentine government recently obtained a “bridge loan” from the CAF (the Latam Development Bank) of $1 billion, effectively getting indebted to pay for its outstanding debt with the IMF.
If completed, this would not be the first time that Argentina relies on the resources made available by the Chinese government to settle part of its duties with the IMF. In June, the Argentine Central Bank disbursed $2.7 billion to the international institution using $1 billion in Chinese yuan, and the remaining number was paid using Special Drawing Rights (SDRs).
In August, Argentina will receive a loan of $7.5 billion from the IMF to intervene “in the case of turbulence situations in the national market,” per Massa’s statements.
Central Bank of Bolivia Announces Operations With Chinese Yuan
The Central Bank of Bolivia recently announced that it was already conducting international settlements using the Chinese yuan, even without having a Chinese bank branch in its territory. The announcement came from Economy Minister Marcelo Montenegro, who acknowledged that the bank was already paying for international transactions with the Chinese currency without giving further details.
Montenegro stated:
It is clear that sometimes it is not necessary to have a bank to carry out operations, but obviously having a Chinese bank or one close to the region can also facilitate operations much more smoothly.
In May, Bolivian President Luis Arce directed the central bank to research if the uses that Brazil and Argentina were giving to the Chinese currency could apply to Bolivia, as the country has been facing a dollar crunch.
Sazmining Announces Launch of Mining Operations in Paraguay
Sazmining, a U.S.-based renewable Bitcoin mining hosting company, announced the construction of a new facility in Paraguay near the Itaipu Dam. The facility, which will host user-owned ASICs, is projected to start operations in September.
Sazmining’s interest in Paraguay is due to its cheap energy costs and the renewable source of its energy, coming from hydro-electrical origins.
Kent Halliburton, President and COO of Sazmining, stated:
Sazmining’s larger goals are focused on fostering a more sustainable and forward-looking future by investing in electrical infrastructure that will continue to serve Paraguay for generations.
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