Perspectives on Business and Economics, Vol. 39, 2021 45 THE PROMOTION OF FINANCIAL INCLUSION IN ARGENTINA THROUGH FINTECH F. Griffin Reichert Fintech and cryptocurrencies have been blossoming in Argentina due to their ability to give people access to necessary financial instruments that many Argentines have moved away from because of persistent hyperinflation and currency controls. This article examines the roots of financial exclusion, the existing platform for fintech and blockchain technologies, and what steps must be taken to shape the future of fintech in Argentina. Storing money under the mattress is antithetical to the principles of economics. When individuals hold on to their savings as physical currency, not only are they unable to take advantage of the time value of money but also the monetary supply that allows banks to lend to the rest of the economy is decreased. In Argentina, many people would rather hide their money in secret holes in the walls, in buried duffel bags, or even under the mattress than invest their hard-earned cash in financial institutions, of which they are wary due to repeated wrongs (N. Mamet, remarks to the Martindale Center, October 6, 2020). Persistent economic instability in Argentina has eroded trust in financial institutions and created a financial exclusion problem that threatens both the nation’s economic growth and the financial well-being of their citizens. Fortunately, Argentina has the potential to address this problem. The nation boasts a young population with a high tech literacy, widespread internet access, and a private sector that creates and adopts disruptive new opportunities. This article examines the roots of the financial exclusion problem, the existing platform for fintech and blockchain technologies, and the potential benefits and consequences of these solutions for individuals and for Argentina as a whole. Financial Exclusion in Argentina Argentina’s volatile history has resulted in widespread financial exclusion—when individuals and businesses do not have access to useful, sustainable, and affordable financial products and services, including transactions, savings, credit, and insurance. Bank account access is the first step necessary in promoting financial inclusion. Simply having a bank account opens the door for people to manage everyday transactions, plan for the future, access forms of credit, choose an insurance policy, invest in businesses and financial markets, and more. It is estimated that in 2017,
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