Cryptocurrency Controversy
Argentine President Javier Milei recently experienced, just a few days apart, both political success and discredit. While the country reached the lowest monthly inflation index in the last 5 years (2,2%), reinforcing the idea of an Argentine takeoff, a tactical error by Milei himself overshadowed the good news: He promoted a cryptocurrency named $Libra via X, only to later withdraw his support, causing capital losses for 40,000 investors in this digital asset.
The situation caused a local political earthquake whose aftershocks extend beyond its own borders. Now, the Argentine leader faces simultaneous requests for investigation from the local opposition and complaints of fraud filed from the United States. Additionally Milei’s recent television interview with local media outlet TN, didn’t help to reduce the wide range of questions by public opinion both in the media and online.
This seems to be the first high impact crisis for the libertarian administration, a relatively new government that had so far managed to overcome all difficulties. The outcome might be enough to teach Milei the rules to the political game he has scorned for so long.
The Iron Triangle
If there is one thing Milei and his cabinet have managed to strengthen since coming to power, it is their political strategy. The president, his sister Karina Milei, and his advisor Santiago Caputo form a close-knit team known as the “iron triangle.” Indeed, the government’s success rests on three sturdy pillars: strong control of government communication, solid results in economic matters, and the firm consolidation of the presidential figure.
Until now, neither the pressure from a fragmented opposition, nor the drastic measures in sensitive areas such as public health and education, nor Milei’s well-known rhetoric, often described as not just politically incorrect but at times aggressive, had managed to pierce this strategy. Even the pursuit of economic objectives and the negotiation of necessary political agreements had proceeded in their favor without major complications or unprecedented delays.
However, the $LIBRA scandal, although seemingly weakly contained by the presidential team, has threatened two of the three pillars of Milei’s master plan: his public image and his control of government communication.
Investor Fallout
Milei’s X post about the $LIBRA cryptocurrency appeared on his profile last Friday for about five hours. The fact that a presidential figure had promoted a private initiative caused widespread speculation, prompting the Argentine leader to delete the original post and clarify in a subsequent message that he was not familiar with the details of the business. This was followed by an immediate depreciation of the asset, millions in losses for investors, rampant speculation about a scam, a flood of criticism, and radio silence from the government over the weekend.
Timing in politics is a powerful asset, yet any opportunity to gain an advantage was lost. Over that weekend, the government issued no official communication, formal explanation, or public apology through any of the usual channels regarding the cryptocurrency case. By silencing its powerful communication engine, it only fueled further questions. A subsequent interview broadcast on Monday was perceived as evasive and dismissive.
This is not the first time the Argentine president has provoked public outrage. However, unlike previous instances, his typically over-the-top communicative style and voracity for responding to criticism backfired this time, forcing him into at least a weekend of silence. That is the real news.
Milei’s other great strength is his image: the passionate economist, skeptical of traditional politics, a man of the people with crystal-clear motivations for his country. Right now, after the “cryptogate” scandal, his persona, credibility, and ability to respond effectively are under scrutiny not only in Argentina but also among world leaders.
Balance Needed
The image of a strong, determined, and heroic Milei is beginning to show some worrying cracks. While his promises of economic results, such as lower inflation, economic reactivation, and exchange stability, continue to be applauded, these achievements are increasingly seen as a secondary concern.
The three pillars of the President’s platform are failing to provide him with the stability he needs. Perhaps, for now, he can hope for nothing better than a fourth pillar, which would guarantee balance and continuity for his project. But in that case, the additional support must come through the very political sensitivity and skill that Javier Milei so disdains.
