Harsh economic restrictions in Argentina have pushed the country’s football clubs towards cryptocurrencies. Recently, the first transfer of a football player via crypto instead of fiat occurred, marking a new era in football finances.
Earlier this month, Sao Paulo Futebol Clube from Brazil paid $6-$8 million worth of USDC to Banfield’s Athletic Club for midfielder Giuliano Galoppo. The oscillating gap reflects the tempestuous value fluctuations between the US Dollar and the Argentinean Peso.
The First Football Cryptocurrency Signing
Galoppo’s transfer from Banfield AC to Sao Paulo FC will likely go down in history as a groundbreaking landmark. For now, it is a sign that sports entities can adopt and incorporate cryptocurrencies into their finances.
The Mexican crypto exchange Bitso mediated the value transfer between the two clubs.
“We are very proud to work with these two clubs for this historical signing of Sao Paulo with all the safety, transparency, and flexibility that the crypto economy has to offer,” said Thales Freitas, Bitso’s director in Brazil.
The football world has embraced new technologies like blockchain and crypto to a certain degree. For example, clubs are launching fan tokens or considering tokenizing players. However, transfers via crypto were not on the immediate agenda for most football entities.
The recent downfall of the Argentinean economy has led to severe economic restrictions across the country. Sports organizations are not an exception. They have to resort to financial alternatives to continue operating.
The gap between the US Dollar and the Argentinean Peso is increasing. Therefore, the Argentinean currency is losing value to a point where using USD-pegged stablecoins for transactions is more advantageous. Clubs are even looking into adjusting their players’ salaries to the USD price and paying them in crypto.
Can Crypto Save Drowning Football Clubs?
Maybe. While Galoppo’s transfer went through and he changed teams, the financial operation is still subject to strict regulations. For example, Argentina’s Central Bank filed the transaction as an export, forcing Banfield to liquidate the acquired USDC into pesos.
Additionally, the legal framework for these operations is still blurry. The authorities take every case as it comes, and potentially not all football crypto transfers may receive the green light.
Meanwhile, as Argentina is changing one economic minister after another, the country’s clubs take the crypto alternative more seriously. Soon, we could expect others to follow Banfield’s example and resort to stablecoins to overcome the current economic crisis.