Argentina’s financial restrictions have reached the sports industry, with the first signing of a local footballer with cryptocurrencies hitting national headlines.
The transfer of midfielder Giuliano Galoppo from Banfield’s Athletic Club to Sao Paulo Futebol Clube was made in USD Coin (USDC), which exceeded $6 million and up to $8 million depending on the volatile exchange rate of the Argentine peso, according to local sources. The transfer was made possible through a collaboration with the Mexican crypto exchange Bitso.
“We are very proud to work with these two clubs for this historic signing of Sao Paulo with all the security, transparency and flexibility that the crypto economy has to offer,” said Thales Freitas, Bitso’s director in Brazil.
The transition occurred amid a difficult financial situation for Argentine sports clubs. The reported peso-dollar exchange gap continues to escalate, affecting the ability of soccer players to be signed by international teams and prompting them to renegotiate their contracts to adjust their wages to the volatile dollar price.
The country’s unstable economy has led to a large adoption of cryptocurrencies, especially stablecoins. The trend towards stablecoins notoriously escalated after the shocking resignation of Argentina’s economy minister earlier this month.
The practice of crypto adoption has also been replicated in sports by both players and clubs in the country. However, this will be the first time clubs can accept cryptocurrencies as payment for international transfers to regain a competitive edge in the market for their players.
Despite the news, the cryptocurrency transaction involving Galoppo will still be subject to regulations. According to Bloomberg, Argentine central bank sources have clarified that Galoppo’s transfer is an export operation. As a result, Banfield will be forced to liquidate its USDC into local currency, pesos, using the official foreign exchange market.
On the other hand, it remains unclear how the professional footballer chooses to exchange USDC to the official currency market directly while allowing the club to resist the central bank’s measures.
Related: Blockchain, crypto set to take sports industry beyond NFT collectibles
A recent study by Big Four accounting firm Deloitte revealed the potential of the crypto ecosystem in redefining revenue streams and fan engagement across the sports industry.
The report expects crypto to create a nexus “around collectibles, tickets, games and games.” For example, with non-fungible tokens (NFTs), the sports industry could introduce initiatives around fractional ownership, which could trigger the reinvention of the ticket resale process.