Tag Archives | peso

Using Bitcoin to Get the Dolar Blue Rate in Argentina

One of our more frequent topics is on the “dolar blue” rate in Argentina. This is the unofficial rate at which the US dollar trades in Argentina. Yesterday it hit a new record high of U$S 1 = ARS $9.40. That’s an 81% difference to the official rate and a great reason never to use your credit card or ATM in Argentina.

There are a few ways to take advantage of the dolar blue rate that we have discussed before:

Bring US dollars and convert at the blue rate.
Pros: the best rate available
Cons: theft, counterfeit bills, finding a cueva to exchange, technically illegal
Use a money transfer service like Xoom or Azimo and get a rate close to the blue rate.
Pros: legal, transfer from your bank account overseas, relatively easy
Cons: not available in all countries, must physically pick up money, paperwork required, rate good but lower than blue rate

A new method has emerged as well using the relatively new digital currency, Bitcoin. Bitcoin is a decentralized currency and payment system that is not under any government control. Check out the video below for a more detailed overview (or check out this Bitcoin course for a much more in-depth explanation):

Ok, so now you know that you know what Bitcoin is, how can you use it in Argentina to get the blue rate?

Argentines are not very fond of holding pesos – especially with inflation estimated at 25% – 30% per year. And with government restrictions on purchasing foreign currency or gold, many Argentines see Bitcoin as an investment opportunity that is outside of the government’s control. Unfortunately, the currency controls also make it impossible for Argentines to purchase Bitcoins online with pesos. This is where the trading process comes in. You purchase Bitcoins and then trade them for physical pesos at the blue rate.

Watch this short documentary film, “Bitcoins in Argentina,” for a great overview of the process:

Ok, so now you’re ready to trade Bitcoins, right? There’s a few steps you’ll need to take:

1. Get some Bitcoins
In order to get Bitcoins, you need to set up an account and purchase them. We’ve found Coinbase to be a great site to do this. This may take several days to set up, so don’t wait for the last minute.

2. Find someone to trade with
There are a few methods for finding a trading partner in Argentina – the Bitcoin Argentina Mailing List, LocalBitcoins, Bitcoin Argentina on Facebook, and Bitcoin Meetup. The mailing list seems to be the most active, but LocalBitcoins is growing rapidly. Once you find a trading partner, agree on the rate, pick a spot to meet and trade away!

So, what are the pros and cons of using Bitcoin?
Pros: relatively easy to use, completely anonymous, high exchange rate, works for people from almost any country, no need to carry cash, no paperwork
Cons: relatively new currency with high level of price fluctuation, must find a trading partner, must meet in person for exchange, false bills

The biggest con in my mind is the high number of price fluctuations and crashes that Bitcoin has experienced, however I think this can be somewhat offset as the seller by buying and selling in the same day. The buyer holding the Bitcoins has a lot more exposure to these price fluctuations. As for finding a trustworthy trading partner, a lot of the resources above will let you see what other trading the person has done before, and be sure and count the money before sending your Bitcoins.

Are you ready to start trading? Let us know in the comments if you do and what your experiences have been.

- Thanks to this Reddit post for more info on Bitcoin in Argentina.

Dolar Blue Hits Record Highs After New AFIP Rules

By DaVe McComb on in Living

The “dolar blue” has hit record highs for the past two days following new rules from AFIP (the Argentine tax agency) that imposed additional fees on the use of Argentine credit cards as well as on travel packages purchased in Argentina for travel outside the country.

First, AFIP raised the surcharge that Argentines must pay for using their credit cards abroad from 15% to 20%. This fee is applied to all purchase made in foreign currency, including Internet purchase. Then, they imposed a 20% tax on all travel purchases made in Argentina for travel abroad. This was designed to reduce the benefit of paying for your travel in pesos at the official rate while getting the blue market rate for your dollars (see example below). Argentine residents can get this 20% back when they file their tax returns.

Initially it was reported that non-residents would no longer be able to buy travel packages or airfare for travel abroad in Argentina, but it seems that this has been changed to allow them to buy the packages with the same 20% surcharge. Supposedly this is a tax that you can get back when you file your foreign tax returns as well, though it is unlikely that most people will do this.

The result of all the new AFIP regulations is that the dolar blue went crazy, jumping from ARS $8.06 on Monday, to ARS $8.25 on Tuesday and then to ARS $8.70 on Wednesday! This is an almost 8% jump in just 2 days – meaning the tax is really only 12%.

So, how does this all work? I think an example is best…

Let’s say you wanted to buy an airline ticket from Buenos Aires (EZE) to New York City (JFK). You go online and find that American Airlines is selling the ticket for U$S 1200. Now, you could buy that ticket on your non-Argentine credit card and you would pay U$S 1200. Simple.

The benefit comes into play when you buy that ticket with your Argentine credit card or pay in pesos at the American Airlines office in Buenos Aires. They would convert that U$S 1200 ticket to pesos at the official rate – ARS $5.10 * U$S 1200 = ARS $6120. Now, assuming you were getting the pesos you needed to pay 3this at the blue market rate (ARS $8.00) rather than the official rate, you’d be getting that same ticket for only U$S 765 (ARS $6120 / ARS $8.00). Supposedly this was being over-exploited by Uruguayans and Chileans who were coming to Argentina specifically to purchase travel. This is why AFIP imposed the new 20$ fee – to make this less attractive.

Yet, even with the new fee, buying that same ticket would be cheaper in Argentina than paying in dollars. Assume that U$S 1200 ticket has $100 in taxes (which you do not pay the 20% charge on), you’d now have to pay U$S 1420 for the ticket. That would be ARS $7242 at the official rate and U$S 875 at today’s blue market rate of ARS $8.27. That’s still a significant savings off the original U$S 1200 price.

So, what did this regulation actually do? Just made it more expensive for Argentines to travel. If you earn and spend in pesos, the dolar blue has relatively little meaning to you and all of this juts makes like more difficult…

Note: The Xoom rate is currently only at $7.53 as it usually takes them a few days to catch up to major blue market changes.

Xoom Now Offering Better than Blue Market Rate

By DaVe McComb on in Living

I know, I know… We’ve had a lot of posts about using Xoom to transfer money to Argentina (and here), but today they’re offering a rate of ARS $6.0213 to USD $1 which we had to write about. This is now better than the blue market rate of ARS $5.93!

It also means that if you use your debit card in Argentina to withdraw cash or use your US credit card (even without foreign transaction fees), you could be losing up to 33%! How’s that you ask?

Well, your debit or credit cards will only give you the standard exchange rate – currently ARS $4.50. When you compare that to Xoom it comes out to be a significant amount of money. For example, if you spend U$S 2999 on your credit cards or through ATM withdrawals, you’re getting $13,495.50 pesos. With Xoom, you’ll get $18,057.95 pesos. Now, I’m sure you can find something to do with an extra $4562 pesos.

- If you use my Xoom link, you’ll get a $15 Amazon gift card and so will I. Another way to maximize your savings.

UPDATE: While Xoom is US only, you can use Azimo to transfer money from the UK to Argentina at the blue rate. Xoom is slightly lower than the blue market rate but changes quite frequently to keep up with it.

Money Transfer Argentina: Xoom Follow-Up

By DaVe McComb on in Living

A few weeks ago I wrote about using Xoom to transfer money from the United States to Argentina (from the UK, use Azimo) and I thought now would be a good chance to follow up on my experiences and the experiences of a few others.

First of all, the rate has skyrocketed to 5.5357 dollars to 1 peso as of today. The official rate is at $4.469. This means that if you transfer the maximum amount of U$S 2,999 rather than withdraw from an ATM, you’ll be earning an extra $3032 pesos / U$S 692. That’s a 22% increase in your money! (UPDATE: as of April 2013, the blue market rate to official rate is at 80% more!)

My first transaction with Xoom was for only $25 and was completely painless. It took about 2 business days for the funds to appear in my Argentine bank account. I also received a $15 Amazon gift card for using a referral link (if you use this link, you’ll get a $15 gift card and so will I).

After that first transaction I decided to transfer the maximum amount – U$S 2999. That process was not as quick due to several verification steps. First I had to verify my identity with Xoom by sending them a photo ID. Next, I had to verify the echeck withdrawal amount from my US bank account. Then, More Money Argentina (Xoom’s transfer partner here) had to verify the source of the funds as well as DNI, CUIL/CUIT, address, etc. This process took just under two weeks. I have been told that the next transfers will go much quicker, but this is something to be aware of.

I transferred the money directly to my Argentine bank account, but I have had several friends go and pick up their money from More Money’s location at Libertad 1057 (open 9am – 6pm business days). This is the only valid location in Capital Federal even though the Xoom site lists other locations. All of my friend’s transactions were completed within two business days and all they had to do was show their passport when picking up the money. Some of them were asked for the source of the funds, but they simply said savings and all was good.

One friend was told that $10,000 pesos was the cut off point that triggered additional paperwork requirements. Another friend was told that Xoom transfers do not appear as cash advances if you use your credit card, though I would confirm this before transferring a large amount.

Have you tried it yet? As I mentioned above, we both get $15 if you use my referral link.

BONUS TIP: Here’s an interesting idea that will work if you have a US bank account and an Argentine credit card. You can make 10% or more on your money and even rack up frequent flier miles if you have a card that earns miles.

Pay yourself or someone else in the US using PayPal and your Argentine credit card. You’ll be billed the official exchange rate for these transactions on your credit card plus the PayPal fees. Now, transfer pesos to yourself using Xoom and pay your credit card with that money. Due to the differences in the official vs. Xoom rates, you will end up making money on the deal. There is a U$S 6000/month limit from Xoom, but this is an interesting way to take advantage of this currency discrepancy and make money for doing virtually nothing.