Argentina’s economic constraints have reached the sports industry, with the first signing of a local footballer with cryptocurrencies making national headlines.
The transfer of midfielder Giuliano Galoppo from Banfield’s Athletic Club to Sao Paulo Futebol Clube was made in USD Coin (USDC), more than $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 partnership with Mexican crypto exchange Bitso.
“We are very proud to partner 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 transfer happened amid a difficult economic situation for Argentine sports clubs. The reported exchange rate gap between pesos and dollars continues to escalate, affecting the ability for football players 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 volatile economy has led to widespread 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 players and clubs in the country. However, this would be the first time clubs would 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 with Galoppo will still be subject to regulation. According to Bloomberg, Argentine central bank sources have clarified that the Galoppo transfer is an export operation. As a result, Banfield will be forced to liquidate their USDC in local currency, pesos, using the official exchange market.
On the other hand, it remains unclear how the professional footballer chooses to exchange USDC directly to the official exchange market, while allowing the club to oppose the measures taken by the central bank.
Related: Blockchain, crypto set to take the sports industry beyond NFT collectibles
A recent survey conducted by Big Four accounting firm Deloitte revealed the potential of the crypto ecosystem in redefining revenue streams and fan engagement in the sports industry.
The report expects crypto to establish a nexus “around sports collectibles, ticketing, betting and gaming.” For example, nonfungible tokens (NFTs) allow the sports industry to introduce initiatives around fractional ownership, which could lead to the reinvention of the ticket resale process.