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> Remember, with a stablecoin, there is no upside to holding. As always people around here tend to see the world from their point of privilege. If you are in T

> Remember, with a stablecoin, there is no upside to holding. As always people around here tend to see the world from their point of privilege. If you are in Turkey, Sudan or Venezuela right now there is a huge upside in holding a stable coin pegged to the dollar. Only 13% of the world population is lucky enough to live on a stable democracy with a stable economic system.

md_ 4y ago
In principle, there's no reason someone like Revolut can't just offer virtual (but backed by segregated client assets) accounts with "real" USD to people living in those countries. It may be a compliance issue, of course. If you want to stay on the good side of the US Treasury, compliance could be expensive, especially in certain countries. But the basic premise here is that USDT's risk premium is worth it as the cost of avoiding compliance, which, sure, I guess.
pmyteh 4y ago
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.
- ulzeraj 4y ago
  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.
  - rukshn 4y ago
    This is literally what’s happening in Sri Lanka at the moment
  - piva00 4y ago
    Argentina has a pretty strong black market of USD, capital controls there didn't stop people from hoarding dollars as a stable currency.
    - aeyes 4y ago
      But the black market has black market exchange rates. You can probably get something a little more reasonable on the open crypto market.
      - Danidada 4y ago
        it's pretty much the same. Black market and crypto market are arbitraged between them so the price of one isn't too different from the other
        unityByFreedom 4y ago
        Ok but without crypto would black market rates rise? I gather that was the point.
        Danidada 4y ago
        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
        thebean11 4y ago
        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.
      - actionablefiber 4y ago
        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.
- nailk 4y ago
  > the upside can be had by holding dollars 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. All that happened.
  - onlyrealcuzzo 4y ago
    > 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.
    - nailk 4y ago
      > 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
      - 4y ago
- whimsicalism 4y ago
  Oh yeah, just hold dollars - what an easy solution.
can16358p 4y ago
Yup. I live in Turkey, and don't trust the local currency (Lira) and the government's power over banks to keep my dollars too. Crypto is the safest in that sense for me, and a stablecoin is ironically more trustworthy than my country's currency in general. Yet I don't trust USDT or UST so I'm on relatively more trustable USDC or BUSD.
- pja 4y ago
  Yes, BUSD & USDC have regular attestations that their holding of USD in bank accounts backed by the US government & US treasuries are real. Tether on the other hand has invested mostly in commercial credit, who’s counterparty they decline to identify. Given that they constitute something like the 5th largest commercial credit fund in the world on that basis & the other funds deny seeing them in their markets, it seems that they’re lending to ... lets say unorthodox counter parties. Some have suggested that they’ve been lending to Chinese builders, but it seems more likely to me that they’ve been lending Tether to cryptocurrency trading houses and marking it up on their books. This would create a self-feeding circular dynamic at one or two removes; if so the whole thing could unwind quite spectacularly.
- ptero 4y ago
  It seems to me that some gold coins would work even better in this situation (for longer term savings, not something you move in and out every month). Did you consider this? An honest question.
  - lupire 4y ago
    Where can I download gold coins?
    - ptero 4y ago
      You compare the convenience of a download against having an asset with a few millenia of history in your physical possession (which is not without its own risks) and pick your poison.

md_ 4y ago

In principle, there's no reason someone like Revolut can't just offer virtual (but backed by segregated client assets) accounts with "real" USD to people living in those countries. It may be a compliance issue, of course. If you want to stay on the good side of the US Treasury, compliance could be expensive, especially in certain countries. But the basic premise here is that USDT's risk premium is worth it as the cost of avoiding compliance, which, sure, I guess.

pmyteh 4y ago

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.

ulzeraj 4y ago
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.
- rukshn 4y ago
  This is literally what’s happening in Sri Lanka at the moment
- piva00 4y ago
  Argentina has a pretty strong black market of USD, capital controls there didn't stop people from hoarding dollars as a stable currency.
  - aeyes 4y ago
    But the black market has black market exchange rates. You can probably get something a little more reasonable on the open crypto market.
    - Danidada 4y ago
      it's pretty much the same. Black market and crypto market are arbitraged between them so the price of one isn't too different from the other
      - unityByFreedom 4y ago
        Ok but without crypto would black market rates rise? I gather that was the point.
        Danidada 4y ago
        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
      - thebean11 4y ago
        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.
    - actionablefiber 4y ago
      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.
nailk 4y ago
> the upside can be had by holding dollars 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. All that happened.
- onlyrealcuzzo 4y ago
  > 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.
  - nailk 4y ago
    > 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
    - 4y ago
whimsicalism 4y ago
Oh yeah, just hold dollars - what an easy solution.

can16358p 4y ago

Yup. I live in Turkey, and don't trust the local currency (Lira) and the government's power over banks to keep my dollars too. Crypto is the safest in that sense for me, and a stablecoin is ironically more trustworthy than my country's currency in general. Yet I don't trust USDT or UST so I'm on relatively more trustable USDC or BUSD.

pja 4y ago
Yes, BUSD & USDC have regular attestations that their holding of USD in bank accounts backed by the US government & US treasuries are real. Tether on the other hand has invested mostly in commercial credit, who’s counterparty they decline to identify. Given that they constitute something like the 5th largest commercial credit fund in the world on that basis & the other funds deny seeing them in their markets, it seems that they’re lending to ... lets say unorthodox counter parties. Some have suggested that they’ve been lending to Chinese builders, but it seems more likely to me that they’ve been lending Tether to cryptocurrency trading houses and marking it up on their books. This would create a self-feeding circular dynamic at one or two removes; if so the whole thing could unwind quite spectacularly.
ptero 4y ago
It seems to me that some gold coins would work even better in this situation (for longer term savings, not something you move in and out every month). Did you consider this? An honest question.
- lupire 4y ago
  Where can I download gold coins?
  - ptero 4y ago
    You compare the convenience of a download against having an asset with a few millenia of history in your physical possession (which is not without its own risks) and pick your poison.