What are chachos?
The Bocade (Debt Cancellation Bond) is a type of alternative currency issued by the government of La Rioja as an alternative to the Argentine peso.
However, given the image that the paper money has, the Bocade is called chacho, as it pays homage to Ángel Vicente “Chacho” Peñaloza, a 19th century leader and military man from La Rioja, known for his resistance against the centralist forces of Buenos Aires.
But the “chachos” are actually a voucher that can be used to pay for services, taxes and products in businesses affiliated with the initiative of the government of Ricardo Quintela, governor of La Rioja and open opponent of Milei’s policy.
A response to the lack of federal funds
The decision to issue the chachos was taken in response to the lack of federal funds, a problem that La Rioja attributes to the government of Javier Milei.
According to the province, the national government owes some 9.3 billion pesos, which has generated a local financial crisis. In the absence of answers and amid an annual inflation of 276.4%, Governor Ricardo Quintela opted for this extreme measure to avoid an economic collapse in the province.
“Due to the non-sending of the funds that correspond to the province by the national government (…), the government of La Rioja decided to put into circulation the Debt Cancellation Bonus (BOCADE)“, wrote the government of La Rioja in a statement at the beginning of July.
How much is a kid worth?
Each chacho has a value equivalent to one Argentine peso. In the first stage of issuance, which covered July and August, Bocades were put into circulation for a total of 9,000 million pesos, with a plan to issue up to 22,500 million.
In fact, the salaries of senior provincial officials are partly paid with these bonuses, which has generated a significant impact on the local economy, reactivating consumption.
The economy is recovering, but with fears
To start, the government of La Rioja distributed the equivalent of 40 dollars, or 50,000 chachos, to each citizen who stood in line at the municipal offices. And, according to Bloomberg, the beneficiaries immediately proceeded to spend it on basic things such as gasoline or food.
Some businesses such as gas stations and butcher shops have reported an increase in sales, although some establishments have imposed strict rules on accepting them.
But some merchants refuse to accept the chachos, due to the distrust generated by the vouchers. Despite the fact that the government of La Rioja indicated that they will accept the chachos from the shops in their offices, with the promise of returning their value in pesos within a period of 48 hours.
When the chachos were launched at the beginning of July, Milei mocked the measure: “They are going to lose value and they are deceiving people with a piece of paper,” she said in an interview with the TN channel.
It’s not the first time
The Bocade is the first “quasi-currency” in 20 years, after those that began to circulate in Argentina since 2001, when a serious economic crisis broke out, ending the fixed parity of one peso equal to one dollar that prevailed during the “convertibility” regime in the 1990s.
During that economic crisis, the provinces issued around 15 different quasi-currencies, including Patacones and Lecop.
With information from AFP and Bloomberg
