As Elon Musk praises Javier Milei's policies, this Argentine province launches its own currency after the president's economic shock therapy took its toll and plunged the local economy into a deep recession

La Rioja, an Argentine province, has introduced its own quasi-currency, the Debt Cancellation Bond (BOCADE), or “chachos.” This measure is a reaction to the economic crisis unleashed by PresidentJavier Milei's austerity measures.

What happened:La Rioja's “chachos” can be used for purchases within the province and to pay provincial taxes and public services. Bloomberg reported that the chachos were in response to a deep recession the province experienced in February after Milei stopped monthly cash transfers from the federal government to the provinces.

The provincial government cited the lack of funds from the national government, devaluation, austerity measures and a deep crisis as reasons for issuing the quasi-currency, according to a Buenos Aires Herald. report in July.

State workers in La Rioja were the first to receive “chachos” as part of their salaries.

Argentina has a history of issuing quasi-currencies during economic crises, most recently in 2002. According to Bloomberg, some are concerned about this new currency as previous local currency experiments and relief plans have largely failed.

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Despite economic difficulties, Tesla Executive Director Elon Musk Recently, Milei praised Milei, stating that he is doing an “incredible job to bring back greatness to Argentina.” Milei criticized La Rioja’s measure, stating that quasi-currencies are a “scam.”

Why is it important?:Milei has been a strong advocate of Bitcoin BTC/USD and other digital currencies, aiming to foster a free-market approach. Its pledge to abolish export taxes, as part of its fiscal plans, has been met with frustration due to the slow pace of reform, particularly in the agricultural sector, a key pillar of the Argentine economy.

His efforts to balance the budget also hit a snag when the Senate approved an increase in pension spending, which could derail his fiscal plans.

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