Some argue it would lead to a loss of national pride and, more importantly, a loss of control of domestic monetary policy. The significance of these arguments may be overstated. Since 1991, when Argentina pegged the peso to the dollar, the government surrendered its control over monetary policy. The dollar has, in effect, become Argentina's second currency. Car loans, bank loans and more than half of all bank deposits are in dollars.
Most businesses accept dollars and local cash machines also provide dollars.
Pegging the peso to the dollar makes the peso more resistant to fluctuations, but many argue the benefits of adopting the dollar. This is because there is the fear that the government will abandon the peg in the face of a crisis and print money. If Argentina is successful in adopting the dollar and avoiding financial chaos, others may follow. Suppose that Argentina's economy was in recession.