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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 ris

by 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.

by pmyteh 4y ago

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.