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So Nigeria has been destroying its currency. Shockingly, some people didn't actually want the little savings they had completely annihilated, and they weren't a

So Nigeria has been destroying its currency. Shockingly, some people didn't actually want the little savings they had completely annihilated, and they weren't allowed to buy actual US dollars, so they bought stablecoins pegged to US dollars. I'm mostly anti-crypto but this is the exact situation where it provides a benefit. The government has garbage monetary policy which it enforces by trampling on peoples rights, all in the service of transferring wealth from the poor to the rich. Stablecoin access can't fix all of that, but it's better than nothing.

fxytrain 3y ago
Not to excuse incompetent leadership, of which we have a lot in Nigeria. However, for more context, Nigeria allows its citizens to have domiciliary (foreign currency - USD, EUR, GBP, etc.) accounts locally. You can/could walk up to the numerous bureau de change operators (approximately 5000 licensed ones until last week - reduced to around 1000) and buy USD with your naira at whatever the real market rate was (not the official rate) and go deposit it in your dollar account. These accounts are part of the SWIFT banking network, and you can send and receive FCY globally. The crypto issue arose from P2P trading platforms manipulating the rates through ads on said platforms without any intention to honour those prices but typically set up to drive the market towards a particular price point. This began a cycle, and within a few weeks, the currency lost 40% of its value. There was a local news article about this manipulation. I don’t think any government would fold its hands in such circumstances.
- ImPostingOnHN 3y ago
  Was the government not manipulating the price of the currency to be artificially high? It sounded like the crypto allowed the price of the currency to fall to its actual value.
- DonsDiscountGas 3y ago
  Maybe I was too quick to jump to conclusions, but honestly I am extremely skeptical of that explanation. Governments always want to blame speculators (see also CEOs and share price drops) but nine times out of ten it's because the price was too high in the first place (see also Soros and GBP in 1992).
  - fxytrain 3y ago
    [dead]
  - imtringued 3y ago
    Speculative attacks are the result of not charging for liquidity. It's kind of like renting out an apartment for free. Why complain about squatters if you are letting them in for free? If you charged for liquidity all the squatters would be gone and you wouldn't be surprised by sudden changes in vacancy rates as squatters move to a different city. But "logic" dictates that no such fee must be allowed to be charged. After all, think of all the poor poor people who would no longer be in debt, they might have to pay a miniscule portion of it! Can't have that.
lern_too_spel 3y ago
They weren't allowed to buy USD except at a regulated exchange rate, and the banks complied. They weren't allowed to buy stablecoins either with the same restrictions, but Coinbase ignored the rules. Breaking the law does not represent a unique benefit of cryptocurrency.
- maxcoder4 3y ago
  But letting the people buy a stable asset that still protect them from inflation is. Maybe I'm wrong, but if they could but it from the bank too, why did they choose cryptocurrency way? I'm sure they had a rational explanation. (disclaimer: I didn't read TFA because of the paywall)
  - lern_too_spel 3y ago
    Because by breaking the law, Coinbase was able to offer a better deal. https://www.quora.com/What-are-the-apps-that-offer-U-S-A-virtual-bank-accounts-to-Nigerians https://www.quora.com/What-are-the-apps-that-offer-U-S-A-vir...

fxytrain 3y ago

Not to excuse incompetent leadership, of which we have a lot in Nigeria. However, for more context, Nigeria allows its citizens to have domiciliary (foreign currency - USD, EUR, GBP, etc.) accounts locally. You can/could walk up to the numerous bureau de change operators (approximately 5000 licensed ones until last week - reduced to around 1000) and buy USD with your naira at whatever the real market rate was (not the official rate) and go deposit it in your dollar account. These accounts are part of the SWIFT banking network, and you can send and receive FCY globally. The crypto issue arose from P2P trading platforms manipulating the rates through ads on said platforms without any intention to honour those prices but typically set up to drive the market towards a particular price point. This began a cycle, and within a few weeks, the currency lost 40% of its value. There was a local news article about this manipulation. I don’t think any government would fold its hands in such circumstances.

ImPostingOnHN 3y ago
Was the government not manipulating the price of the currency to be artificially high? It sounded like the crypto allowed the price of the currency to fall to its actual value.
DonsDiscountGas 3y ago
Maybe I was too quick to jump to conclusions, but honestly I am extremely skeptical of that explanation. Governments always want to blame speculators (see also CEOs and share price drops) but nine times out of ten it's because the price was too high in the first place (see also Soros and GBP in 1992).
- fxytrain 3y ago
  [dead]
- imtringued 3y ago
  Speculative attacks are the result of not charging for liquidity. It's kind of like renting out an apartment for free. Why complain about squatters if you are letting them in for free? If you charged for liquidity all the squatters would be gone and you wouldn't be surprised by sudden changes in vacancy rates as squatters move to a different city. But "logic" dictates that no such fee must be allowed to be charged. After all, think of all the poor poor people who would no longer be in debt, they might have to pay a miniscule portion of it! Can't have that.

lern_too_spel 3y ago

They weren't allowed to buy USD except at a regulated exchange rate, and the banks complied. They weren't allowed to buy stablecoins either with the same restrictions, but Coinbase ignored the rules. Breaking the law does not represent a unique benefit of cryptocurrency.

maxcoder4 3y ago
But letting the people buy a stable asset that still protect them from inflation is. Maybe I'm wrong, but if they could but it from the bank too, why did they choose cryptocurrency way? I'm sure they had a rational explanation. (disclaimer: I didn't read TFA because of the paywall)
- lern_too_spel 3y ago
  Because by breaking the law, Coinbase was able to offer a better deal. https://www.quora.com/What-are-the-apps-that-offer-U-S-A-virtual-bank-accounts-to-Nigerians https://www.quora.com/What-are-the-apps-that-offer-U-S-A-vir...