46 52% of Argentines were unbanked, putting the country significantly behind the global average, which in 2017 was 33%. The nation is ranked marginally ahead of the Middle East and subSaharan Africa in terms of account ownership (World Bank, 2020a). For Argentina to have financial inclusion levels comparable to those of less developed nations poses a looming obstacle in the path toward economic stability. At the heart of this financial exclusion crisis are three core problems: hyperinflation, currency controls, and the informal economy. Argentina has experienced persistent inflation levels over the past two decades that have eroded confidence in the Argentine peso (ARS), as can be seen in Figure 1. High annual inflation rates (nearly 60% in 2019) threaten the government’s ability to pay its sovereign debts and citizens’ ability to strategically plan their lives and run stable businesses (World Bank, 2020b). When individuals are unable to save for the future because of the deflation of their savings, they are driven toward more stable options. Historically, in times of crisis, Argentine citizens have flocked to more stable assets, such as the US dollar and gold. Gold exchanges frequently see spikes in demand when financial crises shake the peso (Webber, 2013). Seen as a stable alternative currency compared to the peso, the US dollar has always been in high demand in Argentina. Due to a limited supply, the Central Bank of Argentina (Banco Central de la República Argentina [BCRA]) often has put currency controls in place to restrict the withdrawal of US dollars. The BCRA must maintain a large reserve of US dollars in order to repay its foreign debts because other countries distrust the volatile peso. The details of these currency controls have changed from regime to regime. In the midst of the COVID-19 pandemic, the BCRA imposed a $200 monthly limit on the amount citizens could withdraw from savings or to repay credit card debt. Furthermore, dollar withdrawals would be heavily taxed, at 35% (Bianchi & Raszewski, 2020). The combination of persistent inflation and frequent currency controls deters individuals from keeping money in bank accounts and watching their savings dissolve or being unable to access them, ultimately leading to financial exclusion. The other factor that has contributed to Figure 1 Annual Inflation in Argentina, 2004–2019 Source: World Bank, 2020b. 2004 2006 2008 2010 2012 2014 2016 2018 2020 Annual Inflation (%) 0 60 50 40 30 20 10
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