Argentines Hold $170B in Cash as Milei Plan Draws Under $1B

Argentines are holding roughly $170 billion in cash outside the banking system even after approval of the Fiscal Innocence law this year, while declared dollar deposits tied to the measure remain below $1 billion.

The Fiscal Innocence law, approved in 2026, lets people deposit previously undeclared U.S. dollars into banks without tax penalties. Lawmakers and market participants expected a sizable portion of the cash hoard to move into the formal financial system, boosting bank liquidity and expanding the tax base. Reported increases in dollar deposits have been minimal.

Adrián Yarde Buller, chief economist at Facimex Valores, called the opportunity ‘enormous’ and warned that rebuilding trust in institutions will take time.

Analysts point to the 2001 ‘corralito’ as a reason for continued caution. During that crisis authorities limited cash withdrawals and converted dollar deposits into pesos at unfavorable rates, an episode that many savers still recall.

Milei ran for office promising to end the central bank and dollarize the economy to halt inflation. He has since scaled back the dollarization push, saying the public prefers the peso. ‘People don’t want it. Strictly speaking, you can’t force things on people,’ he said recently.

Economists and officials say the $170 billion held outside banks represents a potential source of liquidity if confidence returns. Analysts also say legal changes alone may not be enough to overcome long-standing mistrust, and they will watch deposit and disclosure figures in the coming months for signs of change.

Holding dollars as a household store of value has been common in Argentina during periods of high inflation and political uncertainty. The Fiscal Innocence law is one of several recent policies designed to bring undeclared funds into the formal economy; so far the inflow numbers indicate those incentives have not persuaded most holders to deposit their cash.