Since assuming office in late 2023, Javier Milei has made various efforts to encourage Argentines to withdraw their dollars from “under the mattress” — essentially, to reintegrate them into the formal economy. The initial initiative was the Asset Regularisation Regime, a tax amnesty that permitted Argentines to disclose assets that were previously concealed. It launched on July 18, 2024, and its final phase closed on May 8, 2025, with over US$32 billion raised in total. While experts deemed it a significant achievement, it fell short of the expectations set by the Milei administration. In 2025, Congress enacted the Fiscal Innocence Law, permitting Argentines to utilise their undeclared dollars under a presumption of innocence in relation to the tax authority. That was insufficient as well. Earlier this month, Economy Minister Luis Caputo presented Congress with a revised and enhanced version of the law, facilitating the process for taxpayers to regularise undeclared dollars. One of the bill’s most notable changes is that it eliminates the wealth and income ceilings for joining the regime — meaning that, from now on, “large taxpayers” will also be able to benefit.
Milei’s administration is certainly not the first to attempt to encourage savers to disclose their dollar holdings. If anything, it’s the norm: the administrations of Alberto Fernández, Mauricio Macri, and Cristina Fernández de Kirchner all did the same, with varying degrees of success. That’s due to the substantial amount of dollars held by Argentines outside the financial system. According to official INDEC data, the estimated total at the end of 2025 was US$254.9 billion, reflecting an increase of 4.5% from the previous year. For comparison, the loan extended to Argentina by the International Monetary Fund in 2018 — the largest in the institution’s history — amounted to US$45 billion. Despite the stability of the exchange rate, Argentines continue to show a strong desire to purchase dollars. According to Central Bank data, from January to April of this year, individuals made foreign-currency purchases totalling US$8.5 billion without a specific purpose. Christian Naud, senior economist at the research firm ACM, indicated that this early-year demand for dollars is attributed to several factors. On one hand, “there’s precautionary demand and a rebuilding of dollar portfolios, made easier by the normalisation of access to the foreign-exchange market since April of last year.” However, there are also transactional applications: “Card payments, tourism, services abroad and, in general, increased household demand for imported goods and services,” he stated. Naud stated that the true value of the exchange rate “helps explain part of this dynamic.” When the dollar is “lagging” in real terms, it becomes more affordable for the middle and upper classes — it depreciates against the peso, which stimulates demand.
Naud observed that in May, the real value of the dollar was positioned just beneath its levels from May 2017 and was 11% lower than the average from January to April 2018. That reference is no coincidence: April 2018 signalled the onset of the currency crisis that ultimately led to Argentina’s re-engagement with the IMF, instigated by a significant outflow of foreign capital that had been in the country capitalising on high peso yields through carry trade. Looking ahead to next year, Naud stated, “precautionary demand can be expected to gain weight as the 2027 election starts to come onto the market’s radar.” For years, pre-election periods in Argentina have been characterised by a notable increase in dollar demand — a well-established defensive approach by savers to mitigate the impacts of inflation volatility. In September 2025, during the Buenos Aires Province election month when Milei faced defeat, Argentines purchased US$5 billion, marking the highest amount since 2018. Naud anticipates comparable pressure on the dollar as we approach the October 2027 presidential election. “Uncertainty over the continuity or reversal of the current economic program will likely lead to an increase in dollar hedging,” he added.
Horacio Augusto Pereira stated that the Argentine economy is experiencing “a chronic disaster: high inflation, devaluations every other minute, distrust of the peso.” And “What do people do in the face of that? Rationally, they take refuge in dollars to survive,” he stated. “Every time inflation takes off, demand for dollars to hoard goes up. That drains reserves, pressures the exchange rate and ends up creating the very scarcity we then try to manage with currency controls.” Economic historian Julián Zicari noted that until the 1930s, the U.S. dollar “was just another currency” — the pound sterling and even gold held significantly more importance. That would shift following World War II, as the United States solidified its status as the leading Western superpower. Locally, the shift took hold because “Argentina’s economic crises, from the second half of the 20th century onwards, would be tied to a shortage of dollars.” Economic sociologist Ariel Wilkis stated that “over the past eight decades, Argentines’ relationship with the dollar has changed over time,” highlighting several key moments that gradually positioned the dollar at the core of economic life. He highlighted “the great devaluation of the 20th century — the 1958 one, under Arturo Frondizi’s government,” noting that “throughout the 1960s, devaluations were constant.” In late 1958, Frondizi implemented a devaluation of the peso by 68.2%, resulting in inflation exceeding triple digits for the first time in Argentine history, reaching 113%.
Another moment Wilkis emphasised was the last military dictatorship, a period that merged “a policy of economic opening” with “a huge availability of dollars in the financial system.” A new turning point emerged during the hyperinflation experienced under Raúl Alfonsín’s administration in 1989. Wilkis stated that the crisis “spread the use of the dollar to extreme levels — in everyday payments, for example” and “created the conditions for the convertibility policy of the following decade,” which pegged the peso one-to-one to the dollar. During the presidency of Carlos Menem, from the 1990s until January 2002, Argentina operated under a convertibility regime where one peso was equivalent to one dollar. “The paradox of that decade is that, on one hand, the dollar disappears from public life — the currency peg means we stop paying attention to it — and at the same time it becomes a formalised currency in financial life: opening dollar bank accounts, taking out dollar loans, paying debts in dollars, and so on,” Wilkis said. The sociologist observed that although other nations have experienced crises akin to that of Argentina, they did not necessarily convert the dollar into a “popular currency.” The distinction of Argentina, he contended, lies in two interrelated dynamics: one sociopolitical and the other sociocultural. The first is “a systematic accumulation of failures by governments, decade after decade, to build a strong national currency.” The second is “the social learning around the importance of the dollar — how to use it, how to read it, and how to gain a financial edge from it,” the product of one economic crisis after another.