The Prospects and Pitfalls of Argentina's Central Bank Closure and Dollarization

Argentina's President-elect Javier Milei has vowed to close the country's central bank, but the feasibility of such a move remains uncertain. While it is possible for a country to function without a central bank, it would require significant changes to the monetary system and the adoption of alternative currencies like the US dollar and Bitcoin. The challenge lies in replacing Argentina's monetary base, which currently stands at $7.7 billion, and ensuring the country has enough currency for its financial obligations. Additionally, the International Monetary Fund, as Argentina's main creditor, may have a say in the process. Milei's proposal would also require unifying exchange rates and implementing a free convertibility policy.