Underground Argentina: Jewish Banks, Chinese Supermarkets, Disillusioned Youth and the Middle Class Falling into Poverty

Original Author: Sleepy.txt, Dongcha Beating

In Argentina, even the dollar has failed.

Pablo's identity is somewhat special. Ten years ago, he was an employee of Huawei sent to Argentina, living in this South American country for two years; ten years later, he returned to his old haunts as a Web3 developer to attend the Devconnect conference.

This perspective that spans a decade has made him a firsthand witness to a brutal economic experiment.

When he left back then, 1 dollar could only be exchanged for a dozen pesos; now, the black market exchange rate in Argentina has skyrocketed to 1:1400. According to the simplest business logic, this means that if you have dollars in your pocket, you should have king-like purchasing power in this country.

However, this "dollar superiority" lasted only until the first lunch.

"I specifically returned to the ordinary neighborhood where I used to live and found a small restaurant I used to frequent," Pablo recalled. "I ordered a bowl of noodles, and it surprisingly cost 100 yuan when converted."

This was not a wealthy area crowded with tourists, but a "hole-in-the-wall" filled with the aroma of everyday life. Ten years ago, dining here cost an average of only 50 yuan; now, in this place defined by global media as a "failed country," prices have directly matched those of Shanghai's CBD or Paris in Western Europe.

This is a typical case of "stagflation." Although the peso has depreciated more than 100 times, the prices of goods priced in dollars have actually risen by more than 50%.

When a country's credit completely collapses, inflation acts like an indiscriminate flood; even if you are sitting in the seemingly sturdy boat of dollars, the water level will still rise above your ankles. This country has magically passed on the cost of currency collapse to everyone, including those holding hard currency.

Many people think that in such severe turmoil, people would panic and hoard dollars, or embrace cryptocurrencies as predicted by tech believers. But we were all wrong.

Here, young people neither save money nor buy houses, because the moment their salary arrives, its value begins to evaporate; here, the real control over financial lifelines is not held by the central bank, but by a shadow financial network woven together by Jewish moneylenders in the Once district and over 10,000 Chinese supermarkets across Argentina.

Welcome to underground Argentina.

Young People Dare Not Own the Future

To understand Argentina's underground economy, one must first understand the survival logic of a group: those "live for the moment" young people.

If you walk the streets of Buenos Aires at night, you will experience a severe cognitive dissonance; the bars are bustling, the tango halls are filled with music all night long, and young people in restaurants are still generously tipping 10%. This does not seem like a crisis country undergoing "shock therapy," but rather a prosperous era.

But this is not a symbol of prosperity; it is a nearly desperate "doomsday carnival." In the first half of 2024, the country's poverty rate soared to 52.9%; even after Milei's strong push for reforms, 31.6% of people were still struggling below the poverty line in the first quarter of 2025.

In the grand narrative of the Web3 circle, Argentina is often described as a "crypto utopia." The outside world imagines that in this currency-defunct country, young people would go crazy buying USDT or Bitcoin to hedge as soon as they receive their salaries.

But during his field visit, Pablo coldly burst this elite perspective bubble.

"This is actually a misconception," Pablo bluntly pointed out. "Most young people are typical 'moonlight' spenders; after paying rent, utilities, and daily expenses, there is hardly anything left to save for dollars or stablecoins."

It's not that they don't want to hedge; it's that they don't have the qualifications to hedge.

What hinders saving is not just poverty, but also the "devaluation of labor."

From 2017 to 2023, the real wages of Argentinians fell by 37%. Even after Milei took office and nominal wages increased, the purchasing power of private sector wages still lost 14.7% over the past year.

What does this mean? It means that an Argentine young person is working harder this year than last year, but the bread and milk he can buy have decreased. In this environment, "saving" has become an absurd joke. Thus, a nearly rational "inflation immunity" has spread among this generation.

Since no matter how hard they try, they cannot save enough for a down payment on a house, and since the speed of saving can never keep up with the speed of currency evaporation, the only economically rational choice becomes to immediately exchange the pesos that could turn into worthless paper at any moment for instant happiness.

A survey shows that 42% of Argentinians feel anxious all the time, and 40% feel exhausted. But at the same time, as many as 88% admit to combating this anxiety through "emotional spending."

This collective psychological contradiction is precisely a microcosm of the century-long ups and downs of this country; they use the steps of tango to resist the uncertainty of the future, and numb the deep-seated sense of helplessness with barbecue and beer.

But this is just the surface of underground Argentina; where do the billions of pesos in cash that young people spend like crazy ultimately flow to?

They haven't disappeared. Under the cover of night in Buenos Aires, this cash flows like underground rivers, ultimately converging into the hands of two very special groups.

One is the largest "cash vacuum cleaner" in all of Argentina, and the other controls the lifeblood of the exchange rate—the "underground central bank."

Chinese Supermarkets and Jewish Moneylenders

If the Central Bank of Argentina suddenly announced a shutdown tomorrow, the country's financial system might fall into temporary chaos; but if those 13,000 Chinese supermarkets all closed at once, Argentina's social operation could immediately collapse.

In Buenos Aires, the real financial heart does not beat in the grand bank buildings, but hides in the cash registers on the streets and in the deep courtyards of the Once district.

This is a secret alliance formed by two groups of outsiders: one group is supermarket owners from China, and the other group consists of Jewish financiers who have been deeply rooted for a century.

In Argentina, nothing penetrates the fabric of the city more like "Supermercados Chinos (Chinese supermarkets)." As of 2021, the number of Chinese supermarkets in Argentina has exceeded 13,000, accounting for more than 40% of the total number of supermarkets in the country. They may not be as large as Carrefour, but they are ubiquitous.

For Argentina's underground economy, these supermarkets are not just places to buy milk and bread; they are essentially 24/7 "cash storage points."

Most Chinese supermarkets try to encourage customers to pay in cash; some restaurants will remind you that using cash can enjoy discounts at checkout, and some even post notices: "Cash payment discount 10%–15%."

This is actually to evade taxes. Argentina's consumption tax is as high as 21%, and to prevent the government from taking a cut of this cake, businesses are willing to pass on savings to consumers, just to keep massive sales volumes outside the official financial system.

"The tax bureau definitely knows, but has never strictly investigated," Pablo said during the interview.

A report from 2011 showed that at that time, the annual sales of thousands of Chinese supermarkets had already reached 5.98 billion dollars. Today, this number would only be larger. But there is a fatal problem: pesos are "hot potatoes," depreciating every minute and second in an environment of triple-digit annual inflation.

"The Chinese merchants earn a lot of cash in pesos and need to exchange it for yuan to return home, so they look for various ways to exchange money," Pablo said. "For Chinese tourists, the most convenient and best exchange rate channels are Chinese supermarkets or Chinese restaurants, because they urgently need yuan to hedge against the pesos in their hands."

However, scattered tourists cannot consume such a massive amount of cash; Chinese supermarkets need another outlet, and in Buenos Aires, only the underground moneylenders represented by those from the Once district have the capacity to absorb such a scale of cash.

"Historically, Jews gathered in a wholesale area called Once. If you've seen movies about Argentine Jews, some scenes are set in Once," Pablo explained. "There is a synagogue for Jews there, and it is also the only place in Argentina that has ever experienced a terrorist attack."

He was referring to the AMIA bombing on July 18, 1994.

On that day, a car loaded with explosives crashed into the AMIA Jewish Community Center, resulting in 85 deaths and over 300 injuries, marking one of the darkest pages in Argentine history. After that incident, a massive wall was erected outside the synagogue, covered with the word "peace" in various languages.

This disaster completely changed the survival philosophy of the Jewish community. Since then, the entire community has become extremely closed and vigilant. These walls not only block bombs but also create an extremely introverted and highly united circle