Argentina’s economic restraints have reached the sports industry, with the first purchase of a local football player with cryptocurrencies making national news.
Midfielder Giuliano Galoppo’s transfer from Banfield’s Athletic Club to Sao Paulo Futebol Clube was made in USD Coin (USDC), surpassing $ 6 million and up to $ 8 million depending on the Argentine peso’s volatile exchange rate, according to sources locals. The transfer was made possible thanks to a collaboration with the Mexican cryptocurrency exchange Bitso.
“We are very proud to work with these two clubs for this historic São Paulo signature with all the security, transparency and flexibility that the crypto economy has to offer,” said Thales Freitas, director of Bitso in Brazil.
The transfer took place in a difficult economic situation for Argentine sports clubs. The reported exchange rate differential between pesos and dollars continues to widen, impacting football players’ ability to be signed by international teams and prompting them to renegotiate their contracts to adjust their salaries to the volatile dollar price.
The country’s unstable economy has led to a large adoption of cryptocurrencies, especially stablecoins. The stablecoin trend has notoriously intensified following the shock resignation of Argentina’s economy minister earlier this month.
The practice of adopting cryptocurrencies has also been replicated in sports by players and clubs across the country. However, it would be the first time that clubs could accept cryptocurrencies as a form of payment for international transfers to regain a competitive edge in the market for their players.
Despite its novelty, the cryptocurrency transaction involving Gallop will still be subject to regulation. According to Bloomberg, Argentine central bank sources have made it clear that Gallop’s transfer is an export deal. As a result, Banfield will be forced to liquidate its USDC in local currency, the peso, using the official foreign exchange market.
On the other hand, it is still unclear how the professional footballer chooses to trade USDC directly on the official foreign exchange market allowing the club to resist central bank measures.
Related: Blockchain, cryptocurrency ready to take the sports industry beyond NFT collectibles
A recent study by accounting firm Big Four Deloitte revealed the potential of the crypto ecosystem in redefining revenue streams and fan engagement in the sports industry.
The report predicts that cryptocurrencies will create a nexus “around sports collectibles, ticketing, betting and games”. For example, with non-fungible tokens (NFTs), the sports industry can introduce fractional ownership initiatives, which could trigger the reinvention of the ticket resale process.