The economic limits in Argentina have permeated the sports world, as seen by the first local football player to be signed using crypto, which made national news.
The likelihood that Argentina footballers will be recruited by foreign teams decreases as the difference in currency rates between the US dollar and Argentinean pesos widens.
Depending on the erratic conversion rate of the Argentina peso, the transfer of midfielder Giuliano Galoppo from Banfield’s Athletic Club to Sao Paulo Futebol Clube cost more than $6 million and as much as $8 million in USD Coin (USDC). Collaboration with the Mexican cryptocurrency exchange Bitso enabled the transfer.
“We are very proud to work with these two clubs for this historical signing of Sao Paulo with all the safety, transparency, and flexibility that the crypto economy has to offer,” said Thales Freitas, Bitso’s director in Brazil.
The move took place in the midst of a challenging financial environment for Argentina sports clubs. Football players’ chances of being signed by foreign teams are hampered by the stated exchange rate difference between the peso and the dollar, which forces them to renegotiate their contracts in order to adjust their pay to the fluctuating dollar price.
The nation’s unsteady economic situation has resulted in the widespread adoption of cryptocurrencies, particularly stablecoins. After the unexpected departure of Argentina’s economic minister earlier this month, the trend for stablecoins is infamously said to have increased.
Players and teams in the nation have both adopted the usage of cryptocurrencies in sports. To reclaim a market edge for their players, clubs would be able to accept cryptocurrency for the first time as a method of payment for cross-border transfers.
Galoppo’s cryptocurrency transaction will still be governed by laws despite its novelty. Galoppo’s transfer is an export activity, according to sources at the Argentine central bank, according to Bloomberg. Banfield will be compelled to use the official exchange market to convert their USDC into pesos as a result.
However, it is still unknown how the professional player decides to convert USDC to the official exchange market directly, enabling the team to defy the central bank’s restrictions.
The potential of the cryptocurrency ecosystem in reinventing income streams and fan engagement throughout the sports sector was recently shown by research undertaken by Big Four accounting firm Deloitte.
According to the research, a nexus “around sports memorabilia, ticketing, betting, and gaming” would be created by cryptocurrencies. For instance, the sports business can develop efforts around fractional ownership using nonfungible tokens (NFTs), which might lead to the process of reselling tickets being reinvented.