LECOP
Encyclopedia
The LECOP was a bond
issued by Argentine
national government. LECOP (sometimes written as a common word, Lecop), stands for Letra de Cancelación de Obligaciones Provinciales ("Letter of Cancellation of Provincial Obligations").
These bonds were circulated at a substantial discount from their face value, so anybody accepting
was bound to experience devaluation
(or inflation
). While LECOPs were intended as a means to replace legal currency (Argentine peso
s) at a time when cash was scarce, there were occasions in which LECOPs were not accepted as valid means of payment — most notably, most tax
es could only be paid in pesos, or only partly paid in LECOPs. Public utility companies generally restricted the percentage acceptable to a 70-30 ratio, sometimes further limiting LECOP usage to 15% of the total bill.
Other complementary currencies
in Argentina at that time where the Crédito
, the Patacón and the Argentino
.
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
issued by Argentine
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
national government. LECOP (sometimes written as a common word, Lecop), stands for Letra de Cancelación de Obligaciones Provinciales ("Letter of Cancellation of Provincial Obligations").
These bonds were circulated at a substantial discount from their face value, so anybody accepting
was bound to experience devaluation
Devaluation
Devaluation is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged....
(or inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
). While LECOPs were intended as a means to replace legal currency (Argentine peso
Argentine peso
The peso is the currency of Argentina, identified by the symbol $ preceding the amount in the same way as many countries using dollar currencies. It is subdivided into 100 centavos. Its ISO 4217 code is ARS...
s) at a time when cash was scarce, there were occasions in which LECOPs were not accepted as valid means of payment — most notably, most tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
es could only be paid in pesos, or only partly paid in LECOPs. Public utility companies generally restricted the percentage acceptable to a 70-30 ratio, sometimes further limiting LECOP usage to 15% of the total bill.
Other complementary currencies
Complementary currency
Complementary currency is a currency meant to be used as a complement to another currency, typically a national currency. Complementary currency is sometimes referred to as complementary community currency or as community currency...
in Argentina at that time where the Crédito
Crédito
The Crédito was a local currency started on 1 May 1995 in Bernal, province of Buenos Aires, Argentina, on a garage sale, which was the first of many neighbourhood barter markets that emerged in Argentina during the economic crisis....
, the Patacón and the Argentino
Argentine argentino
-Gold currency:The Argentino was an Argentine currency equal to 5 pesos oro sellado.The 1/2 argentino coin was issued in 1881 and 1884 and it weighs 4.0322 grams. The argentino coin was issued from 1881 to 1896 and it weighs 8.0645 grams...
.