Argentine province to have its own currency

Argentine province to have its own currency

“The [federal] Government forces us to do this because of the cruelty of the adjustment,” Quintela said

The Argentine province of La Rioja’s legislature Wednesday approved the issuance of a quasi-monetary unit to pay the public workers’ salaries as budgetary restrictions from the federal government begin to be felt.

Peronist Governor Ricardo Quintela submitted the bill to create the so-called Bono de Cancelación de Deuda (BOCADE), which will be known among users as “Chacho” after slain caudillo Ángel Vicente Peñaloza.

“It is a debt cancellation bond, which is going to be debated today, possibly sanctioned on the day of the date, and which authorizes the issuance of a series of salary cancellation bonds”, Quintela explained upon sending the bill.

The province will start by issuing AR$ 15 billion worth of chachos (some US$ 18,322,300 at the official exchange rate). It remains to be determined whether there will be actual chachos printed or if they will only consist of digital entries into the workers’ bank accounts. Chachos will be legal tender within the province.

“The [federal] Government forces us to do this because of the cruelty of the adjustment,” Quintela said.

“To think that during the election campaign, I was treated as crazy for postulating a system in which there was free currency competition, and now they are promoting it!” President Javier Milei wrote on X from Davos, Switzerland, where he was attending the World Economic Forum gathering.

“Welcome the provincial currencies to the competition, which, I would like to point out, unlike what happened in the past, will in no way be rescued by the national government,” he added. “The nation had to face the correction of a deficit of 15% of GDP, while all the provinces together add up to 1% of GDP,” Milei also posted. “With such an advantage, unless they are very bad, they should be quoted far above par,” he said.

As per Argentina’s Constitution, only the federal government may issue money. However, similar measures were adopted by numerous provinces during the 2002 crisis, claiming chachos or patacones (the unit used then by the Province of Buenos Aires) were not money but bonds.

Quintela replied in a radio interview that La Rioja never asked the national government to rescue its bonds.

Peñaloza (1798–1863) -a.k.a. “El Chacho”- was one of the last caudillos to revolt against the centralism of Buenos Aires. In November 1863 after a military defeat, he surrendered to Major Pablo Irrazábal, who killed him with his spear and ordered his soldiers to fill the body with bullets. His head was cut off and nailed to the top of a post at a square in the presence of his family. His wife, Victoria Romero, was forced to sweep the main square of the city of San Juan in shackles.