If you live in a country with an unstable currency but without strong capital controls, the upside can be had by holding dollars. And that comes without the risk that your known-to-be-a-bit-dodgy nearly-dollar collapses.
That's a rare situation. The first thing a government does when their economy starts to colapse is to force the population to use and save in their dying currency while restricting access to foreign currency to prevent capital flight. Just look at Russia and Argentina.
Can you? I've got to imagine that transacting in a runaway inflationary currency is going to get you bad rates no matter what.
If you want to buy crypto using rubles, Lebanese pounds, Venezuelan bolivars or anything else, you need a counterparty who will accept that currency as payment. And if your currency is losing a lot of its value every day, with no end in sight, your counterparty will not give you anything approximating the official exchange rate, even on an open market, because accepting payment in that currency immediately exposes them to that currency's inflation.
That doesn't make sense. The black market (being illegal) would have significantly higher risks and transaction costs, so even with arbitrage the prices could still be significantly different.
Oh that's a different question IMO. Crypto is making it easier to bring dollars from abroad so I get it does lower the black market cash dollar's prices in that sense. Big international crypto exchanges like binance aren't yet regulated here so technically the crypto world IS part of the black market anyway
Unless your bank kicks you out by some reason (incompetent compliance).
Unless foreign bank refuses your transaction because the bank doesn’t like the color of your passport.
Unless somehow banking system wants to cut extra from your transaction (2.5-4% for transaction) because of double currency conversion you didn’t ask for, because you didn’t specify correct correspondent bank and your bank didn’t tell you about that.
> Unless your bank kicks you out by some reason (incompetent compliance). Unless foreign bank refuses your transaction because the bank doesn’t like the color of your passport. Unless somehow banking system wants to cut extra from your transaction (2.5-4% for transaction) because of double currency conversion you didn’t ask for, because you didn’t specify correct correspondent bank and your bank didn’t tell you about that.
These are all problems invented by Crypto bulls to build a narrative for why Crypto is widely useful.
There are a handful of small, very poor countries where Crypto might have been better than holding local currency. But you also had to be poor in those poor countries for it to make sense for you to buy Crypto instead of hard assets like land or housing - if you were merely interested in bypassing monetary devaluation - and not interested in EXTEMELY risky speculation to get absurd returns.
The total money for people this might even have made a little bit of sense for is maybe $1Bn. Considering Crypto had close to a $3T market cap at some point - this is not a talking point. It's noise.
The real story - and the only story - is that Crypto is and always has been speculation.
I disagree. As someone from Argentina which has a high percentage of crypto owners I can say poor people in poor countries aren't literate enough or don't have the resources (ie: liquidity, bank account) to get cryptos. It's more of a middle class thing here. Real estate isn't cheap in the big cities if you take into consideration the average salary and barely any financial aid to buy property. Besides, being a landlord isn't profitable enough given the initial investment because rental prices are heavily regulated. Also not good for reselling because price have been going down in the last years and it looks like it will keep going like that. Stocks options are heavily limited and also (obviously) regulated. A lot of people here are afraid to invest in stocks here anyway. with an estimated inflation rate of 60% people save money by buying dollar cash, crypto and classic bank instruments (fund investments and fixed term investments)
IIUC, it's quite easy in Argentina to convert pesos to dollars and store them in an Argentine bank with a US correspondent bank - ditto for Euros and Yen.
There are many downsides to Tether. Why is it worth the risk in comparison?
Additionally, there's simply not enough money in Tether compared to the $80B to talk about. It's a distraction.
Again, it's a matter of resources. Not everyone can travel to US and have the money to open a bank account there. Anyway to "easily" convert from pesos to US dollars (which you have to use some financial instruments which aren't trivial for the average citizen) you need to justify all your earnings which not everyone can do because people try to avoid taxes as much as possible.
For instance, most devs I know that work remote jobs for companies abroad, they ask for them to pay in crypto because if you try to get paid in the legal way you get 50% less off the bat in the forceful conversion from usd to pesos and then you get an additional 20-30% less due to taxes
It sounds like it would be worth it to get a US bank account and be paid in USD at that point - assuming developers are making $50k+ USD per year. Virtually all non-small employers would prefer that as well.
> These are all problems invented by Crypto bulls to build a narrative for why Crypto is widely useful.
These problems happened to me and still happening.
Swift transactions in USD from US to UAE are getting double converted (at cost of 2.5-4% of the total amount) and it’s very difficult to get meaningful answer from the bank support about what’s happening
Nothing you wrote makes any sense. We are talking about stable coins. Where does speculations fits here? Also could you make an argument without making accusations?
1. Stable coins make no sense for anyone outside of a handful of small, poor countries.
2. Stable coins make no sense for anyone who has meaningful wealth even in those countries because they have other, better options available.
3. The amount of money in Stable coins is >$100Bn - this is far more than what would go in to resolve any of these problems. Mentioning these problems is noise / a distraction.
4. The primary purpose of stable coins is for people to get in and out of / time trades in cryptocurrency (speculation).
Do you honestly believe people collectively parked >$80Bn in a shady company using it purely as a bank account - because that was really their best option? If not - then these talking points aren't really worth talking about. My whole point.
The "stable" part of the -coin is all marketing. It's true while enough people believe it's true... and if at any point enough people disbelieve it, it'll be everything but.
