Swiping for dollars: Argentine currency apps lure savers amid currency crunch

Juan Martín Landa swipes a finger across his smartphone, carefully checking the latest exchange rate. He is buying dollars, one of many Argentines turning to apps to trade currency after a sharp crash in the country's peso last month.
Landa, a 38-year-old entrepreneur in Buenos Aires, uses a currency exchange platform from digital lender Brubank after his salary lands each month - a routine part of organizing his savings with inflation above 50% and the peso down 33.5% this year.
Argentina, which has a long tradition of savers hoarding dollars, was hit hard in August when a landslide defeat for President Mauricio Macri in a primary election triggered a currency sell-off and pushed the country toward default.
The government imposed capital controls to stem the rout as people shifted their savings to dollars It also sought to protect foreign currency reserves, which fell by nearly $12 billion in August, the steepest monthly decline in at least five years.
"As soon as Argentines get their salary, they convert it to dollars to protect themselves against currency depreciation. Then they spend it little by little as they need it," Carlos Sicchar, founder of recently launched app Dolares Libre, told Reuters.
The currency exchange app, which translates as "Free Dollars," lets people buy and sell dollars among themselves at a free-market rate. On its website it claims to "democratize, innovate and facilitate the currency exchange market."
Sicchar said the app, which started operating last week, saw $30,000 worth of transactions within the first few days and $100,000 in the first week. The trades are legal and the app says it is approved by the country's central bank.
Others recently introduced apps include Bull Exchange, Naranja X, Wilobank and Balanz, which launched a platform last year and says it offers the dollars at the "best price" 24-hours a day. The lure is lower commission costs and faster trades.
Argentina has a long history of recurring economic crises, creating a lack of trust in the local peso, globally one of the worst performing currencies this year.
That has created dollar demand both through official and illicit channels, with savers looking for the best rates. "I buy the dollars from the app because it is cheaper, and I prefer to do that rather than take out the money and go shopping through the black market," Landa said.
These trades are, however, limited by new rules capping how much people can convert into dollars at $10,000 per month - controls that have created a divergence between the official price of the US currency and quotations on the black market.
That gap has expanded sharply to around 10% over the last month, while there is an even larger gap between the spot rate and the average price obtained via trades using the buying and selling of securities to convert pesos to dollars.
The apps claim to give the best official price, cutting down on middlemen fees and commissions.