Argentina does not allow money (in significant amounts) to leave their borders.

Bitcoin is a world-currency.

In order for an argentinian to acquire a Bitcoin, he must pay taxes in excess of 50%, be limited to a few hundred USD in purchases per month, and find somebody who owns bitcoin to take argentine pesos which are in an inflationary spiral at the moment: http://www.xe.com/currencycharts/?from=USD&to=ARS&view=10Y

The value of Bitcoin is doing the exact opposite of argentine pesos.

Anybody holding Bitcoin would have to be insane to exchange them for argentine pesos.

You'd be in a competition at some point with the larger "Western" Bitcoin variant, but that's not an issue in the short term.

The global BTC currency is irrelevant to this use-case which is to provide a local people group with a currency option that cannot be manipulated by the same people that screwed up their original currency option but which is calibrated to the economic output of the local people group (e.g. it's not too expensive relative to the per-capita GDP of local Argentinians).

It doesn't matter that BTC exists globally, or at all. The reason I even mentioned or suggested BTC was because (a) it exists, (b) it has certain properties that make it good at avoiding manipulation, (c) that it can be repurposed.

If you replaced Bitcoin's genesis block with a new one, and got a bunch of people to agree that this was for valuation wrt a particular economy (e.g. because Argentinian BTC miners mine on the chain beginning with this block, and few people in the global community do because there isn't an incentive for them to), then what would happen is that the value of that entirely different and distinct economy ought to come to represent the value gained by that group of miners. Who, hopefully, are in Argentina and who trade with other Argentinians. Does that make sense?

Economic unity is very attractive, especially considering the financial/legal hurdles that come with reaching customers in a dozen different currencies in a dozen different national jurisdictions.

So the proposed solution is to:

a) create a crypto currency for south americans only

b) ask other countries who want to buy your resources to pay in south american coin

c) convert south america coin to bitcoin (how?) once you have transacted with the rest of the world to re-enter the world-currency market

Good luck with that idea. It's never going to work.

Even if Google was based in argentina, and accepted 100% of it's payments in Bitcoin, it would only account for about 10% of Argentina's current GDP.

If no one has any bitcoin then no one can work for bitcoin.

Of course, Argentinians could attempt to bootstrap their own cryptocurrency..

It's ironic that one of the cryptocurrency experts is Argentinian: http://bitslog.wordpress.com

Under such circumstances, how is anyone going to keep bitcoin out of Argentina?

I just don't see how enough of them can get in for it to matter all that much.

Remember, money doesn't have intrinsic value. There's no reason a bunch of pissed off middle class educated people can't en masse adopt a new way of trading resources.

If you (a bitcoin seller) were to acquire pesos and hold them, it wouldn't work too well, as your money would get inflated away, eliminating and reversing any profit. However, you could instead (i) use them for transactions, or (ii) sell them to somebody else who has, say, dollars, but needs to buy assets in Argentina.

These people, not having found out the state of Argentina (keep in mind that find out about all these in english is even harder than in spanish) will not arrive with much cash to exchange. And this is not a hypothetical, I've seen this a couple of times already.

The problem is the economic environment making impossible to survive for a standard business. The tax pressure is incredible high and there are not incentives for doing fair businesses.

Imagine this simple case: a company exports for ~7 pesos per dollar while imports its components for ~11. And we are not talking yet about the paperwork and bribery involved in commercial transactions.

You can say the same today. The problem with Argentina is that while it got a GDP equal to Canada in last century, the money was never good distributed, like in Canada, Germany or France.

So just a couple of people will own more than half Texas(Argentina is big) while the rest of the population could only live as servants.

Today big latifundistas still own most of Argentina, and they buy the gobertment like in the past.