Buenos Aires will become one of the world’s first public entities to help run Ethereum’s network infrastructure, a city official announced last week at Argentina’s ETHLatam conference.
Private companies will work with the city to deploy validator nodes, which are computers that run Ethereum client software and will be installed next year.
The validators, who are in charge of storing data, processing transactions, and adding new blocks to the blockchain, will be included in the proof-of-stake network consensus system that will be implemented in conjunction with the Merge, which is scheduled to take place in mid-September.
The city council’s investment will take place within the regulatory sandbox established by the Buenos Aires legislative branch in early 2021. The nodes will be housed in the city’s data centres.
According to Fernández, a crypto enthusiast, the city’s decision “has exploratory and regulatory purposes” and will help “develop adaptable [crypto] regulation.”
Argentina’s stance on digital assets has since shifted, albeit involuntarily — the International Monetary Fund (IMF) reportedly pressured the country’s central bank in May to prohibit unregulated crypto transactions in traditional banks.
However, the country’s capital has continued to view the emerging market favourably. Buenos Aires Mayor Horacio Rodrguez Larreta announced in April that residents would be able to pay taxes with cryptocurrencies. He later clarified, saying that the process would be handled by cryptocurrency companies because the local government can only accept Argentine pesos.
Argentines are among the world’s top digital asset adopters, owing in part to the South American country’s persistently high inflation and the local peso’s years-long depreciation. Locals, in turn, have begun to invest in cryptocurrency in order to protect their savings from losing purchasing power.