13 ms·

Argentina's currency exchange black markets

99 points by mrzool 4y ago

philliphaydon 4y ago
In Myanmar it’s best to change currency at the airport and not at any currency exchange place. When in the country currency exchange places will exchange based on the quality of the notes you give them. If your note has a little crease, fold, discolouration. Expect it to be devalued. A lot.
gumby 4y ago
Decades ago when the Rupee was much more tightly controlled, a black market flourished for currency exchange. Since I was mostly visiting family I didn't spend much. At one point I did some traveling on my own and had plenty of rupees in my pocket. In a foreigners' hotel lobby I ran into a kid who was eager to do a currency exchange. He was really good at it too: he had a reflexive response for any objection ("I have enough rupees" "But the bank will only give you 20 for a dollar -- I can give you 50"). Finally he asked, "Don't you have a exchange market for dollars in your country?" I answered "In my country dollars are just money" "Yes, same here, so you don't need to go to a bank to change them for rupees". I replied, "In my country I go to the shop to buy a drink and give dollars to the shopkeeper. He gives me my change in dollars. There is no exchange rate into any other currency" Finally he didn't have an immediate response. He looked a bit shocked that there might be a place where people simply transacted business in dollars. And why shouldn't be be surprised? He didn't live in such a place and in his experience all foreigners seemed to use these "dollar" things to buy or sell rupees. Anyway that pause gave me a way to jump out of the conversation and make my escape.
colechristensen 4y ago
Argentina has trade deficit problems. Black markets and cryptocurrencies don’t fix these problems just push the burdens of them onto other people who can’t as easily get around the legal currency framework.
- k__ 4y ago
  Don't know about their trade deficit, but I talked to a few people living there and they said, crypto is the only way for them. Their own currency is unusable, and the government limits how much dollar they buy.
  - the_af 4y ago
    > Their own currency is unusable I'm an Argentinian, and this is an exaggeration. There is certainly very high inflation and we are all worried about it, but the peso is not useless (yet), and the majority of people go about their lives without any access to dollars or crypto. If the peso was useless, these people wouldn't be able to eat. This must also be stressed: outside a minority within the middle class, most working people don't even know what crypto is. > the government limits how much dollar they buy Some nuance here: this is not done out of a whim, but to preserve dollar reserves, needed for international trade. People who buy dollars (myself included) tend to hoard them as savings outside the banking system (making them unavailable) or spend them in gadgets, luxury goods or travel. Note I don't condemn the individual behavior, I just note this creates a collective problem for the country.
    - valcron1000 4y ago
      > this is not done out of a whim, but to preserve dollar reserves This situation happens because the USD price is artificially low. Use the market price and you no longer have this issue.
      - the_af 4y ago
        You mean also taking away all restrictions? I'm no expert but I imagine this would simply leave the middle class out of the loop and simply move all of the dollar buying/hiding in offshore accounts to the big players. I'm not sure Argentina as a country would benefit.
        initplus 4y ago
msoad 4y ago
This article is pro-cryptocurrency but they fail to see that in some spans of time (recently) Bitcoin or other cryptocurrencies lost more value than Argentine Peso. Again, cryptocurrencies are not solving anything.
- k__ 4y ago
  DAI and USDC are pretty stable, especially if in the face of the recent crashes that took BTC and ETH down.
  - notch656a 4y ago
    DAI is imminently dead by .gov pulling a Tornado Cash on all the underlying centralized collateral locked up in DAI.
    - JumpCrisscross 4y ago
      > by .gov pulling a Tornado Cash on all the underlying centralized collateral locked up in DAI I doubt the U.S. would simply blow up stablecoins. (Unless e.g. the Kremlin is buying Iranian munitions with it and nobody does anything to stop it.) That said, coming regulation will likely require elements of KYC. That could result in enforcement actions or users in back-of-mind countries getting locked out. All of which sidesteps dollar stablecoins relying on the dollar for their stability, not anything crypto.
      - notch656a 4y ago
        What's the value proposition of DAI with KYC?
        deleted 4y ago
        [deleted]
        Karrot_Kream 4y ago
        There are plenty of folks who are comfortable with KYC but also want to use dollars as cryptocurrency.
seibelj 4y ago
How to understand central banking and the fiat currency system: All money is a coin created by a national government. USD is America Coin, Sterling is UK coin, Yen is Japan coin, etc. Within the boundaries of the nation, everyone uses the national coin. All goods and services are produced somewhere. If produced and consumed in the same nation, the same coin is used. Things get interesting with international trade. All countries cannot produce every single last thing they want. So they have to purchase from other countries. And the other countries require the use of their own coin when buying their goods and services. Exporters get paid in their nation’s coin, which becomes an important source of foreign currency for the central bank / government. More exports = more conversion into the nation’s coin = more forex. If a car exporter sells cars, the central bank will facilitate payment to them in local coin, but the central bank will take and store the forex. Things get very interesting (and corrupt) with imports. In any given nation, there is only so much forex. If you try to acquire more forex (like USD) by printing more local coin and then trading it for USD, you will get inflation. So countries with well managed central banks try and avoid this. So who can use the limited USD to import what they want becomes subject to political will. Often politically favored firms get access to the USD to buy the goods and materials they need, which they then sell locally. If there simply isn’t any more USD to buy stuff, competitors can’t enter to be an importer. As the most important good in the entire world - oil - is traded almost exclusively in USD, every country has an everlasting and unquenching thirst for USD. This gives the US enormous power, as it can print more money with way less risk of inflation than other countries can. It also lets the US get ever cheaper goods and services from abroad with such demand for a good that takes a mouse click to produce (USD). Bitcoin (and other cryptos if they can be successful) is extremely dangerous to this model because it is not controlled by any government. It is exactly like the old gold system, except way better because you don’t need to protect the gold with soldiers and vaults, move it with huge ships, and so on. It’s gold on the internet. If goods start being priced in Bitcoin directly, it will be akin to the old global system of everything being priced in gold. But in general, think of fiat money like coins and central banks as a single centralized validator node that has sole authority to mint new coins.
- JumpCrisscross 4y ago
  > the most important good in the entire world - oil - is traded almost exclusively in USD This isn’t true and hasn’t been for decades. Oil is just a special case of the far larger American import wallet, the real underpinning—together with its capital markets’ strength [1]—of U.S. dollar hegemony. [1] https://www.bloomberg.com/opinion/articles/2022-03-16/saudi-arabia-s-oil-for-yuan-proposal-won-t-threaten-the-dollar https://www.bloomberg.com/opinion/articles/2022-03-16/saudi-...
setgree 4y ago
This essay was previously published elsewhere on 8/13: https://www.freethink.com/technology/crypto-argentina-black-market-cash https://www.freethink.com/technology/crypto-argentina-black-...
AlbertCory 4y ago
In 1982, I went to Czechoslovakia (this was before the divorce and before the fall of the Wall), and walking around the streets of Prague, people constantly whispered to me, a visibly foreign person, "Change money? Change money?" Dollars or German marks were what they wanted, and I could have gotten a much better exchange rate than the official one, if that was what I wanted. Now? The author's comment that most people use a cueva to handle the crypto for them, rather than managing it themselves, is a real-world datapoint. It means that cuevas are vulnerable to surveillance and control. > The way I explain this to myself, it seems that the key characteristic that draws Argentinians to these relatively centralized cryptocurrencies is that the government doesn't control them, rather than being completely decentralized in a way that no one controls them. The government doesn't control them now. What do you bet there are armies of programmers working for the government, figuring out how they can? So if I lived there, I'd probably be using crypto, too, but I'd always be afraid it's going to vanish someday. Not by the government devaluing the peso, which Argentines are used to, but by some unforeseen technical snafu. So I'd probably spread my bets around, having some US $100's, some bricks, and some of other coins, making sure not to have all my eggs in one basket.
- malkia 4y ago
  Ha! This brings memories. Growing up in Bulgaria, I was 6 years old in 1982, and I was begging my grandma's coworkers (he was their manager) to give me a dollar. Some of their husbands would drive trucks (T.I.R.) and would get ahold of foreign currency, but it was impossible to do so. In fact, the government has set up special shops called CORECOM - https://en.wikipedia.org/wiki/Corecom https://en.wikipedia.org/wiki/Corecom where you can "exchange" your "dirty" foreign currency for stuff not possible to buy anywhere else. I wanted my $1 dollar to get a Kinder Surprise Egg (that, and empty cans out of coca cola, or pez were great for a kid to have). Then regime fell, and in early 1990's all "corecom" eggs were now for sale everywhere... They were no longer that valueable :) (From the wikipedia article, it looks like The Czechoslovakian's version was called Tuzex - https://en.wikipedia.org/wiki/Tuzex https://en.wikipedia.org/wiki/Tuzex - lol - what names, someone should make a game with these names)
  - v-erne 4y ago
verisimi 4y ago
> Argentinians have also learned to not trust banks, even with accounts denominated in other currencies. In 2001-2002, the government enacted something called "el corralito", shutting Argentinians' access to their bank accounts for almost a year. When they could finally extract money again, they found that (a) their USD deposits had to be exchanged for pesos and (b) pesos had lost 2/3 of their value. That couldn't possibly happen in the West. Its only those silly Argentinians that have to worry about this sort of stuff... right?
- deleted 4y ago
  [deleted]
- Cupertino95014 4y ago
  If you look at inflation numbers between 1968 and 1981, it did happen in the US -- just not by 2/3. Those sorts of massive bank controls, though... no, not yet, in the US anyway. Let's not talk about Canada.
  - verisimi 4y ago
    No, don't mention Canada that freezes people's bank accounts by edict. Don't mention Greece or Cyprus either.
- tomjakubowski 4y ago
  I always considered Argentina part of "the west" - it's in the western hemisphere and the common language is Spanish, along with other cultural connections to Spain. What definition are you using?
  - the_af 4y ago
    Argentina is part of the West. Unless someone narrows down that definition to mean English speaking West, in order to exclude us.
    - notch656a 4y ago
hahaxdxd123 4y ago
I know some US startups that hire Argentinians (Scale AI, etc) and pay them in USD-T or USD-C. Not sure if they pay any taxes in the US, but they certainly don't pay the income tax or take the currency conversion haircut in Argentina. Pretty good deal. Still, these people want USD, not really a crypto. I figure some lost their shirts in UST.
- IMTDb 4y ago
  How is Argentina supposed to pay for public services, teachers, doctors, education, roads, etc if the conception is that a "Pretty good deal" means the country does not get any tax money through competent, employed individuals who are supposed to be the one supporting those costs ?
  - notch656a 4y ago
    All those things can be acquired privately. It is possible to buy things without using tax money.
    - the_af 4y ago
      You can only say this if you don't know Argentina. Over here, free (nonprivate) public education is a point of pride. It's political suicide to dismantle the public [1] education system. People will rightfully take to the streets if someone attempts this. Same with many hospitals. To understand what I mean, think of whatever is held dearest in US culture. Is it free speech, freedom of assembly, something like that? Now imagine if a US government told you, "we've determined freedom of speech is not fiscally feasible anymore, so we're taking it away". That's what it would feel like for us. [1] do note in Argentina, "public" doesn't mean the same as in the US.
      - notch656a 4y ago
        The fact that it is a point of pride has literally nothing to do with the fact it is possible to buy health care or education privately. ------ >It also means you are not familiar with Argentina's culture or politics. I'm familiar with the fact Argentina taxes profit at 106% [0]. That is it is illegal to make a profit in Argentina. Perhaps the failures of your government officials is part of the problem in your nation. Perhaps it is possible the individual citizens of your own country know better how to manage their own money than your politicians, and what you see as prideful 'public services' have become ways to rob you and fill the pockets of those connected to your politicians. I hope you are able to find a way forward without getting robbed blind in taxes by politicians who pretend to be acting on your behalf. I certainly don't begrudge your countrymen who have taken matters in their own hands. >Also, most people here would be screwed under a privatized system. Your people seem to be screwed under the current system and things aren't exactly looking up. By some accounts I've heard from your countrymen, only 'most' instead of 'practically everyone' being screwed would actually be a step up. ------------------ >Living in Argentina is not hell, or anywhere close to hell. It's quite a nice country But I never said it was hell and this is a vapid attempt to make me look like someone who hates Argentina and painting it as hell. Surely I would probably even enjoy living there, but I'm sorry to say there are ways in which your people are 'screwed' and the currency issue is one of them. I don't appreciate your attempt to try and make this _Me the man of culture of Argentina who KNOWS the culture vs the outsider who thinks Argentina is hell_, which of course is utter bullshit designed as a back door ad hominem attack. >and whoever told you so is lying to you. You are literally the first Argentinian I've spoken to who claimed they weren't screwed by the political/currency situation, and I've spoken to a lot of them. I'd suggest you stop interpreting my comments as some attack on Argentina, rather interpret them as thought on how to deal with a system where your politicians fuck you with policies like making it illegal to make a profit, which is something that 'screws' everyone. The sooner you realize your precious public institutions of 'pride' are really the way in which your politicians bluff you into lining their own pockets and getting robbed blind by their policies, the better. [0] https://www.doingbusiness.org/content/dam/doingBusiness/country/a/argentina/ARG.pdf https://www.doingbusiness.org/content/dam/doingBusiness/coun...
tuatoru 4y ago
Argentina is the poster child for what happens when a country's leaders insist on "a strong currency" above all else. In Argentina's case, by pegging to the US dollar. If the Argentinian peso had been floating for the last six decades, Argentina's trade deficit and inflation problems would be distant memories. The difficulty is that politically you can't get there from here any more. A sudden shock like floating the currency would seriously impoverish the politically connected elite, for a while.
- martinald 4y ago
  From 2015 to 2019 the Argentina peso was fully convertable - there wasn't any currency controls.
  - brobinson 4y ago
    Yeah, this. They oscillate between currency controls and no currency controls. Left wing government -> currency controls Right wing government -> currency controls removed
    - frozenlettuce 4y ago
      It is worth mention that Macri's government had controlled prices - but still "right wing" for Argentina's standards. Combine that with a 55% workforce being employed by the government and a culture of printing money https://en.mercopress.com/2020/07/27/in-argentina-55-of-all-registered-workers-are-employed-by-government https://en.mercopress.com/2020/07/27/in-argentina-55-of-all-... As they say, the world has developed nations, developing nations, Japan and Argentina.
    - justbored123 4y ago
      [dead]
  - initplus 4y ago
    But during that time period people (wisely) saw that currency controls were still on the table in the future, and acted as such. The fact that they the controls are expected to return has a chilling effect. When you remove currency controls you need to convince the public that in fact they controls are gone for good and never coming back. Such a thing was done in my home country in the mid 80s, and we have had a much more stable currency and economy since.
robocat 4y ago
Article says “$40 billion in net shipments of U.S. currency”[0] total over many years (mostly $100 notes from article) yet Argentina only imports $5B[1] to $6B[2] billion of goods from the USA per year! That is one very very sweet deal for the USA. Especially considering the USA dollar inflation depreciates the value of the physical bills over time. [0] 1993 https://www.federalreserve.gov/pubs/ifdp/1993/460/ifdp460.pdf https://www.federalreserve.gov/pubs/ifdp/1993/460/ifdp460.pd... [1] https://oec.world/en/profile/country/arg https://oec.world/en/profile/country/arg [2] https://wits.worldbank.org/CountryProfile/en/Country/ARG/Year/LTST/TradeFlow/Import/Partner/all/ https://wits.worldbank.org/CountryProfile/en/Country/ARG/Yea... Edit: $5B looks like hex and makes me double double the B billion making the text unreadable, however I am guessing too many readers here don’t like the metric 5G$, which I would otherwise prefer to use. I guess I could write the billion in full, but then this footnote would be pointless.
- mobilefriendly 4y ago
  The benefit to the United States from the dollar serving as the world's reserve currency is enormous, and poorly understood. Congress has been foolishly pursuing fiscal policies that put it at risk.
  - anonu 4y ago
    What sort of fiscal policies are you referring to? If you're referring to things like FINCEN and FATCA, I would argue these only strengthen the reliability and dependence on the USD abroad.
    - hammock 4y ago
      Fiscal policy usually is a euphemism for deficit spending in this context (contrasted or complementary to monetary policy- primarily the setting of interest rates)
rhodorhoades 4y ago
If you western union yourself you get the street rate.
pedalpete 4y ago
Why does the author think they should be able to get USD out of an ATM in a non-US country? Does this happen in any country? I can't think of any country I've been to other than the US which let me withdrawal USD from an ATM. When telling friends about some of the benefits of Crypto, I often use Argentina as an example, but this one comment regarding ATM -> USD I think is hurting the credibility of this author.
- Scoundreller 4y ago
  Some Canadian banks have ATMs on Canadian soil in airports and border towns that will dispense USD. I’d guess “dollarized” non-US countries definitely do too.
  - Mountain_Skies 4y ago
    Yes, in Ecuador that happens, which is nice if you're a tourist from the US. When I was there, the local bank didn't even add a fee for using their ATM, though my US bank added their own charge. Still better than in the US where both banks would add a fee.
  - trashtester 4y ago
    I don't think those ATM's carry the dollars for use within Canada, though. Rather, they're there so that travellers can bring some dollars to countries with a non-functioning financial system (for instance with currency controls).
- santimt 4y ago
  In Uruguay, neighbor of Argentina, you can extract up to 500 USD daily from ATMs.
- cesarb 4y ago
  Here in Brazil, I've seen a couple of ATMs from a major bank which allow you to directly get USD out of them. I searched just now and found a list of these ATMs: https://www.bb.com.br/pbb/pagina-inicial/voce/produtos-e-servicos/contas/todos-os-servicos/taa-cambio#/ https://www.bb.com.br/pbb/pagina-inicial/voce/produtos-e-ser... (other banks might have them too, but the ones I've personally seen are on this list).
gillesjacobs 4y ago
> For example, crypto enthusiasts often imagine a world where individuals control their own wallets directly — storing the cryptographic code on their local computers or phones, not using a third party, like MetaMask. MetaMask is a local self-managed wallet though, not a third party in the sense that the MetaMask service company manages your keys.
- rvz 4y ago
  Exactly. I'm not sure where the author of this article has got the idea that MetaMask is a custodial crypto wallet provider, because it isn't.
  - easrng 4y ago
    It is however entirely reliant on infura.
    - metachris 4y ago
      That's a default rpc provider to get Blockchain requests out and data in. aAnd you can change that to any rpc provider in the settings.
      - ejanus 4y ago
        And you can do without MetaMask with a few lines of Javascript.
mrg2k8 4y ago
This is quite common in countries that have regulated exchange rates. From some I've visited, Angola and Iran even had websites with the black market rate, while in Turkmenistan I had to rely on public wisdom.
- refurb 4y ago
  Indeed. It's actually happening in Vietnam right now. The official exchange rate is ~23,000 VND per USD, but you can get up to 24,000 VND per USD on the unofficial market. It's interesting, because Vietnam does have currency controls, but has so much USD flowing in through exports (and remittence) that it has the foreign currency reserves to keep the VND in a very narrow band (similar to what Singapore does). It hasn't always done a great job in the past, but for the past decade or so it's keep it's currency pegged quite closely to the USD. But over the past few months with the USD strengthening considerably, you start to see a much bigger gap in the official vs. unofficial exchange rates.
  - latchkey 4y ago
    Not 'right now', it has been this way since I first moved over there in 2016 and probably even longer before that. This is also why the US keeps labelling Vietnam as a currency manipulator [1]. If you get quoted in USD there (which isn't legal, but happens anyway), the conversion rate is often ~25k. Your best bet is to find a local viet kieu to do conversions... they tend to give much better rates than the banks. Second to that are the gold dealers, but be careful as people often wait outside to follow and later rob you. Vietnam is a strangely rich country. It appears from the outside like people are super poor (and they are!), but the amount of stored wealth there is absolutely insane. It is as if they don't know how to spend it. Don't forget, if you see a supercar there, which you do all the time in the larger cities, it is actually a 300% import duty, plus whatever you had to pay on top of that for coffee money. [1] https://thediplomat.com/2021/07/vietnam-us-reach-accord-on-alleged-currency-manipulation/ https://thediplomat.com/2021/07/vietnam-us-reach-accord-on-a...
dalmo3 4y ago
Am I the only one puzzled by the 100% average inflation over the last century figure? That's 2^100, which would mean a single peso in 1922 had the purchasing power of 1.26 * 10^30 ARS today, or roughly a trillion times the total value of the world's assets.
- tehlike 4y ago
  Welcome to Turkish economy too.
  - ejanus 4y ago
    Also Nigeria.
- scatters 4y ago
  The peso was revalued several times, so divide by 10^13 (if you held a 1922 peso m$n through the revaluations, it would only get you 10^-13 pesos convertible today). 100% is still an exaggeration though.
saurik 4y ago
I am so sick of this strange take on decentralization that, because some people happen to use an exchange to store their money, somehow that means decentralization is worthless. :/ E-mail is decentralized even if most people don't host their own e-mail servers and even if most people use the same third-party host, and it simply wouldn't be the same product or anywhere near as powerful or valuable to its users if it were fully centralized on exactly one provider. The reality is that there are a number of exchanges--I don't even have access to Binance in the US! (I can use Binance.US, but that's an entirely separate product from a technically separate company)... I have been mostly using Kraken recently, but I used to use Coinbase--that are all able to cater to different markets under different regulatory schemes and yet can interoperate because of the decentralized blockchain protocol, and that's why the tokens stored on Binance have value in the first place. So, no: I assure you that these people value "decentralization" even if they are using a custodial wallet of some kind, in the same way that I hope we can all agree that the people who use e-mail or telephone numbers or domain names all value decentralization even if almost no one runs their own fully vertical stacks of servers, carriers, and registrars, because without that decentralization you would be trapped into a walled garden and forced to deal with a single jurisdiction: that you even can use Binance and interoperate with Coinbase is decentralization at work.
coretx 4y ago
Do they still accept Reichsmark ?

99 points by mrzool 4y ago

In Myanmar it’s best to change currency at the airport and not at any currency exchange place. When in the country currency exchange places will exchange based on the quality of the notes you give them. If your note has a little crease, fold, discolouration. Expect it to be devalued. A lot.

gumby 4y ago

Decades ago when the Rupee was much more tightly controlled, a black market flourished for currency exchange. Since I was mostly visiting family I didn't spend much. At one point I did some traveling on my own and had plenty of rupees in my pocket. In a foreigners' hotel lobby I ran into a kid who was eager to do a currency exchange. He was really good at it too: he had a reflexive response for any objection ("I have enough rupees" "But the bank will only give you 20 for a dollar -- I can give you 50"). Finally he asked, "Don't you have a exchange market for dollars in your country?" I answered "In my country dollars are just money" "Yes, same here, so you don't need to go to a bank to change them for rupees". I replied, "In my country I go to the shop to buy a drink and give dollars to the shopkeeper. He gives me my change in dollars. There is no exchange rate into any other currency" Finally he didn't have an immediate response. He looked a bit shocked that there might be a place where people simply transacted business in dollars. And why shouldn't be be surprised? He didn't live in such a place and in his experience all foreigners seemed to use these "dollar" things to buy or sell rupees. Anyway that pause gave me a way to jump out of the conversation and make my escape.

colechristensen 4y ago

Argentina has trade deficit problems. Black markets and cryptocurrencies don’t fix these problems just push the burdens of them onto other people who can’t as easily get around the legal currency framework.

k__ 4y ago
Don't know about their trade deficit, but I talked to a few people living there and they said, crypto is the only way for them. Their own currency is unusable, and the government limits how much dollar they buy.
- the_af 4y ago
  > Their own currency is unusable I'm an Argentinian, and this is an exaggeration. There is certainly very high inflation and we are all worried about it, but the peso is not useless (yet), and the majority of people go about their lives without any access to dollars or crypto. If the peso was useless, these people wouldn't be able to eat. This must also be stressed: outside a minority within the middle class, most working people don't even know what crypto is. > the government limits how much dollar they buy Some nuance here: this is not done out of a whim, but to preserve dollar reserves, needed for international trade. People who buy dollars (myself included) tend to hoard them as savings outside the banking system (making them unavailable) or spend them in gadgets, luxury goods or travel. Note I don't condemn the individual behavior, I just note this creates a collective problem for the country.
  - valcron1000 4y ago
    > this is not done out of a whim, but to preserve dollar reserves This situation happens because the USD price is artificially low. Use the market price and you no longer have this issue.
    - the_af 4y ago
      You mean also taking away all restrictions? I'm no expert but I imagine this would simply leave the middle class out of the loop and simply move all of the dollar buying/hiding in offshore accounts to the big players. I'm not sure Argentina as a country would benefit.
      - initplus 4y ago

msoad 4y ago

This article is pro-cryptocurrency but they fail to see that in some spans of time (recently) Bitcoin or other cryptocurrencies lost more value than Argentine Peso. Again, cryptocurrencies are not solving anything.

k__ 4y ago
DAI and USDC are pretty stable, especially if in the face of the recent crashes that took BTC and ETH down.
- notch656a 4y ago
  DAI is imminently dead by .gov pulling a Tornado Cash on all the underlying centralized collateral locked up in DAI.
  - JumpCrisscross 4y ago
    > by .gov pulling a Tornado Cash on all the underlying centralized collateral locked up in DAI I doubt the U.S. would simply blow up stablecoins. (Unless e.g. the Kremlin is buying Iranian munitions with it and nobody does anything to stop it.) That said, coming regulation will likely require elements of KYC. That could result in enforcement actions or users in back-of-mind countries getting locked out. All of which sidesteps dollar stablecoins relying on the dollar for their stability, not anything crypto.
    - notch656a 4y ago
      What's the value proposition of DAI with KYC?
      - deleted 4y ago
        [deleted]
      - Karrot_Kream 4y ago
        There are plenty of folks who are comfortable with KYC but also want to use dollars as cryptocurrency.

seibelj 4y ago

How to understand central banking and the fiat currency system: All money is a coin created by a national government. USD is America Coin, Sterling is UK coin, Yen is Japan coin, etc. Within the boundaries of the nation, everyone uses the national coin. All goods and services are produced somewhere. If produced and consumed in the same nation, the same coin is used. Things get interesting with international trade. All countries cannot produce every single last thing they want. So they have to purchase from other countries. And the other countries require the use of their own coin when buying their goods and services. Exporters get paid in their nation’s coin, which becomes an important source of foreign currency for the central bank / government. More exports = more conversion into the nation’s coin = more forex. If a car exporter sells cars, the central bank will facilitate payment to them in local coin, but the central bank will take and store the forex. Things get very interesting (and corrupt) with imports. In any given nation, there is only so much forex. If you try to acquire more forex (like USD) by printing more local coin and then trading it for USD, you will get inflation. So countries with well managed central banks try and avoid this. So who can use the limited USD to import what they want becomes subject to political will. Often politically favored firms get access to the USD to buy the goods and materials they need, which they then sell locally. If there simply isn’t any more USD to buy stuff, competitors can’t enter to be an importer. As the most important good in the entire world - oil - is traded almost exclusively in USD, every country has an everlasting and unquenching thirst for USD. This gives the US enormous power, as it can print more money with way less risk of inflation than other countries can. It also lets the US get ever cheaper goods and services from abroad with such demand for a good that takes a mouse click to produce (USD). Bitcoin (and other cryptos if they can be successful) is extremely dangerous to this model because it is not controlled by any government. It is exactly like the old gold system, except way better because you don’t need to protect the gold with soldiers and vaults, move it with huge ships, and so on. It’s gold on the internet. If goods start being priced in Bitcoin directly, it will be akin to the old global system of everything being priced in gold. But in general, think of fiat money like coins and central banks as a single centralized validator node that has sole authority to mint new coins.

JumpCrisscross 4y ago
> the most important good in the entire world - oil - is traded almost exclusively in USD This isn’t true and hasn’t been for decades. Oil is just a special case of the far larger American import wallet, the real underpinning—together with its capital markets’ strength [1]—of U.S. dollar hegemony. [1] https://www.bloomberg.com/opinion/articles/2022-03-16/saudi-arabia-s-oil-for-yuan-proposal-won-t-threaten-the-dollar https://www.bloomberg.com/opinion/articles/2022-03-16/saudi-...

setgree 4y ago

This essay was previously published elsewhere on 8/13: https://www.freethink.com/technology/crypto-argentina-black-market-cash https://www.freethink.com/technology/crypto-argentina-black-...

AlbertCory 4y ago

In 1982, I went to Czechoslovakia (this was before the divorce and before the fall of the Wall), and walking around the streets of Prague, people constantly whispered to me, a visibly foreign person, "Change money? Change money?" Dollars or German marks were what they wanted, and I could have gotten a much better exchange rate than the official one, if that was what I wanted. Now? The author's comment that most people use a cueva to handle the crypto for them, rather than managing it themselves, is a real-world datapoint. It means that cuevas are vulnerable to surveillance and control. > The way I explain this to myself, it seems that the key characteristic that draws Argentinians to these relatively centralized cryptocurrencies is that the government doesn't control them, rather than being completely decentralized in a way that no one controls them. The government doesn't control them now. What do you bet there are armies of programmers working for the government, figuring out how they can? So if I lived there, I'd probably be using crypto, too, but I'd always be afraid it's going to vanish someday. Not by the government devaluing the peso, which Argentines are used to, but by some unforeseen technical snafu. So I'd probably spread my bets around, having some US $100's, some bricks, and some of other coins, making sure not to have all my eggs in one basket.

malkia 4y ago
Ha! This brings memories. Growing up in Bulgaria, I was 6 years old in 1982, and I was begging my grandma's coworkers (he was their manager) to give me a dollar. Some of their husbands would drive trucks (T.I.R.) and would get ahold of foreign currency, but it was impossible to do so. In fact, the government has set up special shops called CORECOM - https://en.wikipedia.org/wiki/Corecom https://en.wikipedia.org/wiki/Corecom where you can "exchange" your "dirty" foreign currency for stuff not possible to buy anywhere else. I wanted my $1 dollar to get a Kinder Surprise Egg (that, and empty cans out of coca cola, or pez were great for a kid to have). Then regime fell, and in early 1990's all "corecom" eggs were now for sale everywhere... They were no longer that valueable :) (From the wikipedia article, it looks like The Czechoslovakian's version was called Tuzex - https://en.wikipedia.org/wiki/Tuzex https://en.wikipedia.org/wiki/Tuzex - lol - what names, someone should make a game with these names)
- v-erne 4y ago

verisimi 4y ago

> Argentinians have also learned to not trust banks, even with accounts denominated in other currencies. In 2001-2002, the government enacted something called "el corralito", shutting Argentinians' access to their bank accounts for almost a year. When they could finally extract money again, they found that (a) their USD deposits had to be exchanged for pesos and (b) pesos had lost 2/3 of their value. That couldn't possibly happen in the West. Its only those silly Argentinians that have to worry about this sort of stuff... right?

deleted 4y ago
[deleted]
Cupertino95014 4y ago
If you look at inflation numbers between 1968 and 1981, it did happen in the US -- just not by 2/3. Those sorts of massive bank controls, though... no, not yet, in the US anyway. Let's not talk about Canada.
- verisimi 4y ago
  No, don't mention Canada that freezes people's bank accounts by edict. Don't mention Greece or Cyprus either.
tomjakubowski 4y ago
I always considered Argentina part of "the west" - it's in the western hemisphere and the common language is Spanish, along with other cultural connections to Spain. What definition are you using?
- the_af 4y ago
  Argentina is part of the West. Unless someone narrows down that definition to mean English speaking West, in order to exclude us.
  - notch656a 4y ago

hahaxdxd123 4y ago

I know some US startups that hire Argentinians (Scale AI, etc) and pay them in USD-T or USD-C. Not sure if they pay any taxes in the US, but they certainly don't pay the income tax or take the currency conversion haircut in Argentina. Pretty good deal. Still, these people want USD, not really a crypto. I figure some lost their shirts in UST.

IMTDb 4y ago
How is Argentina supposed to pay for public services, teachers, doctors, education, roads, etc if the conception is that a "Pretty good deal" means the country does not get any tax money through competent, employed individuals who are supposed to be the one supporting those costs ?
- notch656a 4y ago
  All those things can be acquired privately. It is possible to buy things without using tax money.
  - the_af 4y ago
    You can only say this if you don't know Argentina. Over here, free (nonprivate) public education is a point of pride. It's political suicide to dismantle the public [1] education system. People will rightfully take to the streets if someone attempts this. Same with many hospitals. To understand what I mean, think of whatever is held dearest in US culture. Is it free speech, freedom of assembly, something like that? Now imagine if a US government told you, "we've determined freedom of speech is not fiscally feasible anymore, so we're taking it away". That's what it would feel like for us. [1] do note in Argentina, "public" doesn't mean the same as in the US.
    - notch656a 4y ago
      The fact that it is a point of pride has literally nothing to do with the fact it is possible to buy health care or education privately. ------ >It also means you are not familiar with Argentina's culture or politics. I'm familiar with the fact Argentina taxes profit at 106% [0]. That is it is illegal to make a profit in Argentina. Perhaps the failures of your government officials is part of the problem in your nation. Perhaps it is possible the individual citizens of your own country know better how to manage their own money than your politicians, and what you see as prideful 'public services' have become ways to rob you and fill the pockets of those connected to your politicians. I hope you are able to find a way forward without getting robbed blind in taxes by politicians who pretend to be acting on your behalf. I certainly don't begrudge your countrymen who have taken matters in their own hands. >Also, most people here would be screwed under a privatized system. Your people seem to be screwed under the current system and things aren't exactly looking up. By some accounts I've heard from your countrymen, only 'most' instead of 'practically everyone' being screwed would actually be a step up. ------------------ >Living in Argentina is not hell, or anywhere close to hell. It's quite a nice country But I never said it was hell and this is a vapid attempt to make me look like someone who hates Argentina and painting it as hell. Surely I would probably even enjoy living there, but I'm sorry to say there are ways in which your people are 'screwed' and the currency issue is one of them. I don't appreciate your attempt to try and make this _Me the man of culture of Argentina who KNOWS the culture vs the outsider who thinks Argentina is hell_, which of course is utter bullshit designed as a back door ad hominem attack. >and whoever told you so is lying to you. You are literally the first Argentinian I've spoken to who claimed they weren't screwed by the political/currency situation, and I've spoken to a lot of them. I'd suggest you stop interpreting my comments as some attack on Argentina, rather interpret them as thought on how to deal with a system where your politicians fuck you with policies like making it illegal to make a profit, which is something that 'screws' everyone. The sooner you realize your precious public institutions of 'pride' are really the way in which your politicians bluff you into lining their own pockets and getting robbed blind by their policies, the better. [0] https://www.doingbusiness.org/content/dam/doingBusiness/country/a/argentina/ARG.pdf https://www.doingbusiness.org/content/dam/doingBusiness/coun...

tuatoru 4y ago

Argentina is the poster child for what happens when a country's leaders insist on "a strong currency" above all else. In Argentina's case, by pegging to the US dollar. If the Argentinian peso had been floating for the last six decades, Argentina's trade deficit and inflation problems would be distant memories. The difficulty is that politically you can't get there from here any more. A sudden shock like floating the currency would seriously impoverish the politically connected elite, for a while.

martinald 4y ago
From 2015 to 2019 the Argentina peso was fully convertable - there wasn't any currency controls.
- brobinson 4y ago
  Yeah, this. They oscillate between currency controls and no currency controls. Left wing government -> currency controls Right wing government -> currency controls removed
  - frozenlettuce 4y ago
    It is worth mention that Macri's government had controlled prices - but still "right wing" for Argentina's standards. Combine that with a 55% workforce being employed by the government and a culture of printing money https://en.mercopress.com/2020/07/27/in-argentina-55-of-all-registered-workers-are-employed-by-government https://en.mercopress.com/2020/07/27/in-argentina-55-of-all-... As they say, the world has developed nations, developing nations, Japan and Argentina.
  - justbored123 4y ago
    [dead]
- initplus 4y ago
  But during that time period people (wisely) saw that currency controls were still on the table in the future, and acted as such. The fact that they the controls are expected to return has a chilling effect. When you remove currency controls you need to convince the public that in fact they controls are gone for good and never coming back. Such a thing was done in my home country in the mid 80s, and we have had a much more stable currency and economy since.

robocat 4y ago

Article says “$40 billion in net shipments of U.S. currency”[0] total over many years (mostly $100 notes from article) yet Argentina only imports $5B[1] to $6B[2] billion of goods from the USA per year! That is one very very sweet deal for the USA. Especially considering the USA dollar inflation depreciates the value of the physical bills over time. [0] 1993 https://www.federalreserve.gov/pubs/ifdp/1993/460/ifdp460.pdf https://www.federalreserve.gov/pubs/ifdp/1993/460/ifdp460.pd... [1] https://oec.world/en/profile/country/arg https://oec.world/en/profile/country/arg [2] https://wits.worldbank.org/CountryProfile/en/Country/ARG/Year/LTST/TradeFlow/Import/Partner/all/ https://wits.worldbank.org/CountryProfile/en/Country/ARG/Yea... Edit: $5B looks like hex and makes me double double the B billion making the text unreadable, however I am guessing too many readers here don’t like the metric 5G$, which I would otherwise prefer to use. I guess I could write the billion in full, but then this footnote would be pointless.

mobilefriendly 4y ago
The benefit to the United States from the dollar serving as the world's reserve currency is enormous, and poorly understood. Congress has been foolishly pursuing fiscal policies that put it at risk.
- anonu 4y ago
  What sort of fiscal policies are you referring to? If you're referring to things like FINCEN and FATCA, I would argue these only strengthen the reliability and dependence on the USD abroad.
  - hammock 4y ago
    Fiscal policy usually is a euphemism for deficit spending in this context (contrasted or complementary to monetary policy- primarily the setting of interest rates)

rhodorhoades 4y ago

If you western union yourself you get the street rate.

pedalpete 4y ago

Why does the author think they should be able to get USD out of an ATM in a non-US country? Does this happen in any country? I can't think of any country I've been to other than the US which let me withdrawal USD from an ATM. When telling friends about some of the benefits of Crypto, I often use Argentina as an example, but this one comment regarding ATM -> USD I think is hurting the credibility of this author.

Scoundreller 4y ago
Some Canadian banks have ATMs on Canadian soil in airports and border towns that will dispense USD. I’d guess “dollarized” non-US countries definitely do too.
- Mountain_Skies 4y ago
  Yes, in Ecuador that happens, which is nice if you're a tourist from the US. When I was there, the local bank didn't even add a fee for using their ATM, though my US bank added their own charge. Still better than in the US where both banks would add a fee.
- trashtester 4y ago
  I don't think those ATM's carry the dollars for use within Canada, though. Rather, they're there so that travellers can bring some dollars to countries with a non-functioning financial system (for instance with currency controls).
santimt 4y ago
In Uruguay, neighbor of Argentina, you can extract up to 500 USD daily from ATMs.
cesarb 4y ago
Here in Brazil, I've seen a couple of ATMs from a major bank which allow you to directly get USD out of them. I searched just now and found a list of these ATMs: https://www.bb.com.br/pbb/pagina-inicial/voce/produtos-e-servicos/contas/todos-os-servicos/taa-cambio#/ https://www.bb.com.br/pbb/pagina-inicial/voce/produtos-e-ser... (other banks might have them too, but the ones I've personally seen are on this list).

gillesjacobs 4y ago

> For example, crypto enthusiasts often imagine a world where individuals control their own wallets directly — storing the cryptographic code on their local computers or phones, not using a third party, like MetaMask. MetaMask is a local self-managed wallet though, not a third party in the sense that the MetaMask service company manages your keys.

rvz 4y ago
Exactly. I'm not sure where the author of this article has got the idea that MetaMask is a custodial crypto wallet provider, because it isn't.
- easrng 4y ago
  It is however entirely reliant on infura.
  - metachris 4y ago
    That's a default rpc provider to get Blockchain requests out and data in. aAnd you can change that to any rpc provider in the settings.
    - ejanus 4y ago
      And you can do without MetaMask with a few lines of Javascript.

mrg2k8 4y ago

This is quite common in countries that have regulated exchange rates. From some I've visited, Angola and Iran even had websites with the black market rate, while in Turkmenistan I had to rely on public wisdom.

refurb 4y ago
Indeed. It's actually happening in Vietnam right now. The official exchange rate is ~23,000 VND per USD, but you can get up to 24,000 VND per USD on the unofficial market. It's interesting, because Vietnam does have currency controls, but has so much USD flowing in through exports (and remittence) that it has the foreign currency reserves to keep the VND in a very narrow band (similar to what Singapore does). It hasn't always done a great job in the past, but for the past decade or so it's keep it's currency pegged quite closely to the USD. But over the past few months with the USD strengthening considerably, you start to see a much bigger gap in the official vs. unofficial exchange rates.
- latchkey 4y ago
  Not 'right now', it has been this way since I first moved over there in 2016 and probably even longer before that. This is also why the US keeps labelling Vietnam as a currency manipulator [1]. If you get quoted in USD there (which isn't legal, but happens anyway), the conversion rate is often ~25k. Your best bet is to find a local viet kieu to do conversions... they tend to give much better rates than the banks. Second to that are the gold dealers, but be careful as people often wait outside to follow and later rob you. Vietnam is a strangely rich country. It appears from the outside like people are super poor (and they are!), but the amount of stored wealth there is absolutely insane. It is as if they don't know how to spend it. Don't forget, if you see a supercar there, which you do all the time in the larger cities, it is actually a 300% import duty, plus whatever you had to pay on top of that for coffee money. [1] https://thediplomat.com/2021/07/vietnam-us-reach-accord-on-alleged-currency-manipulation/ https://thediplomat.com/2021/07/vietnam-us-reach-accord-on-a...

dalmo3 4y ago

Am I the only one puzzled by the 100% average inflation over the last century figure? That's 2^100, which would mean a single peso in 1922 had the purchasing power of 1.26 * 10^30 ARS today, or roughly a trillion times the total value of the world's assets.

tehlike 4y ago
Welcome to Turkish economy too.
- ejanus 4y ago
  Also Nigeria.
scatters 4y ago
The peso was revalued several times, so divide by 10^13 (if you held a 1922 peso m$n through the revaluations, it would only get you 10^-13 pesos convertible today). 100% is still an exaggeration though.

saurik 4y ago

I am so sick of this strange take on decentralization that, because some people happen to use an exchange to store their money, somehow that means decentralization is worthless. :/ E-mail is decentralized even if most people don't host their own e-mail servers and even if most people use the same third-party host, and it simply wouldn't be the same product or anywhere near as powerful or valuable to its users if it were fully centralized on exactly one provider. The reality is that there are a number of exchanges--I don't even have access to Binance in the US! (I can use Binance.US, but that's an entirely separate product from a technically separate company)... I have been mostly using Kraken recently, but I used to use Coinbase--that are all able to cater to different markets under different regulatory schemes and yet can interoperate because of the decentralized blockchain protocol, and that's why the tokens stored on Binance have value in the first place. So, no: I assure you that these people value "decentralization" even if they are using a custodial wallet of some kind, in the same way that I hope we can all agree that the people who use e-mail or telephone numbers or domain names all value decentralization even if almost no one runs their own fully vertical stacks of servers, carriers, and registrars, because without that decentralization you would be trapped into a walled garden and forced to deal with a single jurisdiction: that you even can use Binance and interoperate with Coinbase is decentralization at work.

coretx 4y ago

Do they still accept Reichsmark ?