Argentine President Javier Milei, who swept to power on a radical platform of dollarizing the economy, dissolving the central bank, and abolishing the peso, has now admitted that the grand plan is faltering. In a recent televised interview, Milei stated bluntly: “The people don’t want it.” He explained that despite the government’s approval of using the U.S. dollar for financial transactions, citizens continue to opt for the peso.
Endogenous Dollarization Rejected by Citizens
Milei elaborated on his failed “endogenous dollarization” strategy, which allowed Argentines to freely use any currency, including Bitcoin, for transactions. “We proposed an endogenous dollarization. Endogenous. That means if you want, you can carry out your transactions in dollars, and yet people don’t do it. We enacted a tax amnesty, and people still don’t take advantage of it,” he lamented. He emphasized that “strictly speaking, you cannot force people to do things.” These remarks drew sharp criticism on social media, where some users accused him of using dollarization as a campaign tool only to abandon the promise once in office.
Failure of Monetary Competition Policy
In 2024, Milei implemented a system of monetary competition, allowing Argentines to use any currency of their choice. He also partially lifted capital controls and introduced a floating exchange rate within a fixed band. However, the policy backfired. The peso remained the default medium of exchange, and the dollar failed to gain traction. Analysts attribute this to deep-seated habit, limited access to physical dollars, and the public’s anticipation of continued peso devaluation. The failure of competition underscores the deep-rooted preference for the national currency despite decades of inflation.
U.S. Treasury Intervention Weighs In
As the peso’s volatility escalated, U.S. Treasury Secretary Scott Bessent stepped in during October 2025 to stabilize the Argentine foreign exchange market. “Argentina is a beacon in Latin America. This is not a bailout; it’s buying low and selling high. The peso is undervalued,” Bessent declared. The intervention, backed by the Trump administration, was linked to political support for Milei’s electoral success. While the intervention temporarily steadied the peso, it did not resolve Argentina’s structural economic woes, and the path to dollarization remains uncertain.
Future of Economic Reform in Doubt
Milei’s acknowledgment that dollarization has stalled represents a major setback for his ambitious reform agenda. With inflation still high, foreign reserves depleted, and public resistance to austerity mounting, the president may be forced to recalibrate his strategy. Options include seeking a new deal with the International Monetary Fund, pursuing a more gradual currency reform, or even leveraging digital assets such as Bitcoin, which Milei has previously supported. However, the broader challenge for any emerging market attempting full dollarization—loss of monetary sovereignty, behavioral inertia, and dependence on external support—looms large over Argentina’s future.