5 ms·

While "banning crypto" is a challenging task, making cryptocurrency useless in your jurisdiction is extremely easy. prohibit any business to accept crypto as p

by leifg 5y ago

While "banning crypto" is a challenging task, making cryptocurrency useless in your jurisdiction is extremely easy. prohibit any business to accept crypto as payment, ban crypto exchanges from operating in your country, ban banks of your country to accept transaction that they suspect coming from cryptocurrency exchanges You can still have your crypto wallet, but what use is it if you can't exchange it in your local currency? You can always meet someone in an ally or travel outside the country and bring cash back in but these are solutions that don't scale.

notch656a 5y ago
They do scale and you merely have to witness the insane amount of black-market trade between relatively low tax Paraguay and Brazil/Argentina to see that. The border between Argentina and Paraguay doesn't even have passport controls most the time, let alone customs. Also just because crypto can't be spent by most local vendors doesn't mean it's not valuable. Stocks can't be spent either but if you had a traditional bearer certificate like in the old days (paper stock with no owner except by merely holding the paper) it was just fine for trade and people did just that in the Weimar Republic when they had hyperinflation. Worst case you can just spend the crypto in foreign location, import the goods and sell them locally.
- leifg 5y ago
  Aren't Paraguay, Brazil and Argentina in the same trade union? I don't know the details of Mercosur but in the EU you can buy whatever you want in any other EU country and take it back home without the need for customs. Where is the black market part of that trade? As for your trade example I would like to see the details of that. There are not a lot of vendors that accept crypto and those who do, use 3rd parties which then usually require some amount of KYC (even if it's is minimal). Combine that with how many vendors are actually able/willing to ship to the country in question and you are left with a very small set of online stores. Add shipping costs and custom fees that will eat in your margin. So yes in theory you can setup an import/export company empire in order to exchange your crypto into local currency but that is pretty much the definition of "not scaling". My point is: if a country wants to make cryptocurrency useless they can totally do it.
  - notch656a 5y ago
    I'm not aware of all the customs details in Mercosur but if it is like EU then I would just spend all crypto in Paraguay and then bring gold or whatever back through without customs on other side. Lots of commodities that are high density you can carry on your person and fit a decade of Argentina wages on your person in a single <$100 bus ride.
- mvindahl 5y ago
  If you need to cross a border to fetch your hard currency (or equivalent amount of goods) then what is the value add of using crypto compared to, say, opening a bank account in Montevideo and making a bank transfer?
  - kragen 5y ago
    Also my girlfriend points out that possibly there's less financial surveillance in Paraguay, and if you travel to Uruguay everything is more expensive, whereas Paraguay is poor so everything is cheap. But still AFAIK nobody here banks in Paraguay because you get robbed there.
    - deleted 5y ago
      [deleted]
  - notch656a 5y ago
    The presumption absolutely no one will trade you crypto in your own country and you can't just mail out or in cash somehow seems like a pretty steep one (particularly in Argentina where black market trade of USD and all array of other stuff is rampant); but you must surely see the different between having your cash stored in a private wallet vs a bank account with a country that quite likely has tax and other legal treaties with your own. I can't imagine it would be a warm feeling for someone with tax liabilities in Argentina to have a white-market bank account in a friendly country nearby.
  - kragen 5y ago
    They have dollar-bill-sniffing dogs on the ferryboat to Montevideo, so being able to cross any border rather than one specific border is a pretty big win. But actually, lots of Venezuelan refugees right here in Argentina buy Bitcoin to send to their families back in Venezuela, or the families of other Venezuelan refugees who pay them, and all the black-market currency changers are trying to get into Bitcoin now. A lot of them are still confused about the difference between Bitcoin, Tether, and Binance, though.
    - 5y ago

by leifg 5y ago

notch656a 5y ago

They do scale and you merely have to witness the insane amount of black-market trade between relatively low tax Paraguay and Brazil/Argentina to see that. The border between Argentina and Paraguay doesn't even have passport controls most the time, let alone customs. Also just because crypto can't be spent by most local vendors doesn't mean it's not valuable. Stocks can't be spent either but if you had a traditional bearer certificate like in the old days (paper stock with no owner except by merely holding the paper) it was just fine for trade and people did just that in the Weimar Republic when they had hyperinflation. Worst case you can just spend the crypto in foreign location, import the goods and sell them locally.

leifg 5y ago
Aren't Paraguay, Brazil and Argentina in the same trade union? I don't know the details of Mercosur but in the EU you can buy whatever you want in any other EU country and take it back home without the need for customs. Where is the black market part of that trade? As for your trade example I would like to see the details of that. There are not a lot of vendors that accept crypto and those who do, use 3rd parties which then usually require some amount of KYC (even if it's is minimal). Combine that with how many vendors are actually able/willing to ship to the country in question and you are left with a very small set of online stores. Add shipping costs and custom fees that will eat in your margin. So yes in theory you can setup an import/export company empire in order to exchange your crypto into local currency but that is pretty much the definition of "not scaling". My point is: if a country wants to make cryptocurrency useless they can totally do it.
- notch656a 5y ago
  I'm not aware of all the customs details in Mercosur but if it is like EU then I would just spend all crypto in Paraguay and then bring gold or whatever back through without customs on other side. Lots of commodities that are high density you can carry on your person and fit a decade of Argentina wages on your person in a single <$100 bus ride.
mvindahl 5y ago
If you need to cross a border to fetch your hard currency (or equivalent amount of goods) then what is the value add of using crypto compared to, say, opening a bank account in Montevideo and making a bank transfer?
- kragen 5y ago
  Also my girlfriend points out that possibly there's less financial surveillance in Paraguay, and if you travel to Uruguay everything is more expensive, whereas Paraguay is poor so everything is cheap. But still AFAIK nobody here banks in Paraguay because you get robbed there.
  - deleted 5y ago
    [deleted]
- notch656a 5y ago
  The presumption absolutely no one will trade you crypto in your own country and you can't just mail out or in cash somehow seems like a pretty steep one (particularly in Argentina where black market trade of USD and all array of other stuff is rampant); but you must surely see the different between having your cash stored in a private wallet vs a bank account with a country that quite likely has tax and other legal treaties with your own. I can't imagine it would be a warm feeling for someone with tax liabilities in Argentina to have a white-market bank account in a friendly country nearby.
- kragen 5y ago
  They have dollar-bill-sniffing dogs on the ferryboat to Montevideo, so being able to cross any border rather than one specific border is a pretty big win. But actually, lots of Venezuelan refugees right here in Argentina buy Bitcoin to send to their families back in Venezuela, or the families of other Venezuelan refugees who pay them, and all the black-market currency changers are trying to get into Bitcoin now. A lot of them are still confused about the difference between Bitcoin, Tether, and Binance, though.
  - 5y ago