Will the Argentina province of La Rioja print its own currency?

Maybe so:

Milei’s austerity is biting hard in La Rioja, an olive and wine region home to 384,000 people — out of a population of 46mn — where intense heat pushes many businesses to take a siesta from 1 to 6pm. Almost 75 per cent of the province’s budget comes from redistributed taxes collected by the national government, and 67 per cent of registered workers are employed by the state.

The province’s finances had been “decimated” in recent months, governor Ricardo Quintela said in an interview, citing Milei’s halting of public works projects and his refusal to transfer the 20.8bn pesos ($26mn) that he says La Rioja is owed based on historical agreements with the central government…

In an effort to pay public workers, La Rioja’s state legislature, dominated by Quintela’s left-leaning Peronist movement, has approved a plan to issue 22.5bn pesos ($28mn) worth of so-called “bocades”. These provincial government bonds can be used to pay local taxes, bills for public services such as energy and water and — in theory — to buy goods from private companies. Bocades — nicknamed a “quasi-currency” in Argentina — will be used to top up public employees’ salaries by 30 per cent. Quintela said they would start to be issued within 90 days, though La Rioja may opt to issue them only digitally.

Quintela said that Bocades would be exchangeable for pesos at the provincially-owned bank. However, given the province’s scarce supply of pesos, the plan relies on “people starting to trust in the bonds’ value” so that they don’t exchange them immediately.

And:

Argentina’s provinces have dabbled in quasi-currencies before. In the early 2000s, amid a severe recession and several years of deflation, more than a dozen provinces including La Rioja issued bonds that functioned as currencies.

The logic of this is not surprising.  When very strong disinflationary pressures are in place, liquidity is quite scarce.  Suppliers will step into the void to try to supply it, even if the overall macroeconomic consequences are negative.  Such “local currencies” were common in the 1930s, though most of them did not last long.  Expect scrip and gift certificates to make a comeback as well, although this version of the idea transfers seigniorage to a very strapped local government.

Here is more from the FT.

Addendum: Congress just dealt with Milei agenda further setbacks.