Argentina Records The Country's First Bitcoin-Based Rental Contract

Rent an Apartment Using Bitcoin

Argentina's and potentially the world's first-ever rental agreement based on Bitcoin has been signed marking a major milestone for cryptocurrencies. The county’s local media outlet Paginal12 reported that the agreement was signed last week for an apartment in Rosario, Argentina's third-largest city. The owner and the tenant signed a rental agreement that states the monthly rent should be paid in Bitcoin, the most popular and widely used cryptocurrency in the world. This comes after major legal reforms were brought in by the country's newly elected president.

What are the terms of the world’s first BTC rental contract?

As per the local news outlet, the agreed-upon monthly rent will correspond to 100 Tether (USDT), which is a stablecoin pegged to the US dollar and the monthly payment will be made in Bitcoin.

The tenant will have to transfer the funds through the local crypto platform Fiwind. The tenant will convert his money (probably in pesos) to Bitcoin to make the rent payment. Paginal12 also mentions that the two parties in the contract are both experienced crypto users.

A company spokesperson told the publication that it is the first agreement of its kind, "at least in Argentina and no other company has any records of such an agreement."

Why would someone want to pay Bitcoin for rent?

In a Business Insider report, Florencia Feldman, Fiwind's marketing lead, said that while it is a personal decision, there may be other factors considered as well.

"We assume that it may be related to the expectation that, in 2024, the price of Bitcoin is anticipated to rise due to the halving and other factors, such as the approval of SEC on Bitcoin ETFs." Thus, it makes some sense to sign such contracts.

Further Argentinians have increasingly embraced cryptocurrencies in recent years, as their local currency, the peso, has eroded in value, causing massive inflation.

As per an FX Empire report, cryptocurrency experts believe that the use of Bitcoin in contracts signals a major step toward crypto being used more widely in the country.

Is Bitcoin rental agreement legal?

The Argentine rental law and several parts of the national legal system were amended by the newly elected President Javier Milei, a cryptocurrency supporter. Thus, with the election of Milei, who came into power in November 2023, amid rampant inflation, Argentina has allowed Bitcoin to serve as a valid currency in official contracts.

Last year in December, Diana Mondino, the minister of foreign affairs, international trade, and worship, announced that a decree aimed at economic reform and deregulation permitted the use of Bitcoin and other cryptocurrencies under certain conditions. Further, the newly appointed Foreign Minister confirmed that the country has officially endorsed the use of Bitcoin in all legally binding contracts.

Apart from rental agreements in Bitcoin, the Argentine government has also taken steps to facilitate the legalization of cryptocurrency holdings, even for individuals who have fallen behind on their tax declarations, as per a Bitcoin World report.

Under the new framework, taxpayers have the option to declare their cryptocurrency holdings with a progressive flat tax rate. Citizens who declare their holdings by the end of March 2024 will incur a tax rate of 5%. However, the rate will increase to 10% for declarations made from April onwards and 15% for those made between July and September.

These measures reflect the concrete effort made by the Argentine government to create a regulatory framework that allows the use of cryptocurrencies while simultaneously addressing fiscal concerns.