La Rioja Governor Ricardo Quintela presented a bill in the provincial legislature on Tuesday that, if approved, would allow the province to issue its own currency. 

“I do not want our people to die of hunger,” said the governor. “The currency would have a percentage in cash and another in bonds. The province would receive these bonds as a way of paying for utilities, taxes, and fees.” 

“Regarding businesses, an agreement with the Chamber of Commerce would have to be reached for them to receive this currency as a form of payment,” he explained.

Quintela said the move is a response to President Javier Milei’s decision to extend last year’s national budget, which meant annual inflation drastically lowered the spending power of provincial funds. He also said that he is discussing the possibility of a new federal tax share law alongside other governors —  known as coparticipación in Spanish, federal tax shares are public funds drawn from federal taxes and distributed between the provinces.

“In this context, issuing bonds is not a novelty for the province. It has used this tool at different times to face crises due to the unpredictability of national [federal tax share] resources,” reads the end of the bill’s introduction.

Federal tax shares have long been a source of tension between the national and provincial governments, with a fierce political battle last year over Buenos Aires’ stake. In December, Quintela was one of eight governors — the Liga de Gobernadores — who demanded increasing taxes to compensate for the government’s devaluation. 

The 11-page bill cites two other instances when La Rioja’s legislature agreed to issue its own currency due to the country’s economic situation. “The first time was during the government of Carlos Menem in 1985 (Law No. 4534) and the last one in 2001 (Law No. 7113). In both instances, the decision was made to comply with salary obligations and to keep utilities operational.”

“The present bill submitted for the consideration of the Chamber of Deputies seeks to give the province a tool that combines new technologies while taking economic reality into account,” the introduction concluded.

Originally published in Ámbito