One of Brazil’s major football teams São Paulo made an announcement about their acquisition of Argentinian mid-table club Banfield player Giuliano Galoppo this week.
CEO of Bitso Brazil, Thales Araújo de Freitas, claimed that the transaction is a historic moment for São Paulo, Bitso, and the South American football.
In January, Bitso became a sponsor of the São Paulo club — the largest of its kind in Brazil and the owner of the legendary Morumbi stadium.
This announcement has led to a considerable interest in Argentina, where it was perceived as Banfield’s attempt to avoid the country’s foreign exchange limits, which required the exporters to convert their US dollars into Argentine pesos within five days from the date of transaction.
As the regulations of the Central Bank of Argentina (BCRA) do not mention cryptocurrencies, it would make some sense for Banfield to use USD Coin (USDC, a stablecoin) to avoid BCRA’s regulations. Otherwise, the club would receive 131 Argentine pesos (ARS) per U.S. dollar, while the U.S. dollar in the financial and informal markets exceeds 300 ARS, if BCRA forced the club to liquidate its exports in the official exchange market.
Neither club disclosed the amount of the deal, but according to Argentine newspaper La Nacion, the deal was estimated at $8 million, which is a hefty amount for a club of Banfield’s size.
Other difficulties are brought up with Banfield’s use of crypto. Based on BCRA resolution published last week, the club will be prohibited for 90 days from accessing official market to purchase players at the official rate due to the club trading with USDC.
Banfield will receive ARS 1 billion after the transaction if it keeps BCRA’s word. It would have to get ARS 2.4 billion in local financial markets if it wanted to purchase the same player for the same amount, which the market U.S. dollar quotation is 130% higher.
However, as the BCRA’s reserves are exhausted, and it is anticipated to be negative by more than $4 billion.
Although the introduction of USDC accelerated the transfer and was good marketing, it did not address Banfield’s fundamental issues and made it worse.
