[ulzeraj]

> 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.

[pmyteh]

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]

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.

[piva00]

Argentina has a pretty strong black market of USD, capital controls there didn't stop people from hoarding dollars as a stable currency.

[aeyes]

But the black market has black market exchange rates. You can probably get something a little more reasonable on the open crypto market.

[actionablefiber]

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.

[Danidada]

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

[thebean11]

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.

[unityByFreedom]

Ok but without crypto would black market rates rise? I gather that was the point.

[rukshn]

This is literally what’s happening in Sri Lanka at the moment

[nailk]

> 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]

> 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.

[pjc50]

> These are all problems invented by Crypto bulls to build a narrative for why Crypto is widely useful.

These are real things that have happened, although they're not very widespread. The question is whether using a risky system with no safety net is better than risking this: https://www.telegraph.co.uk/personal-banking/current-account...

[Danidada]

I disagree. As someone from Argentina which has a high percentage of crypto owners I can say poor people in poor countries aren't literate enough or don't have the resources (ie: liquidity, bank account) to get cryptos. It's more of a middle class thing here. Real estate isn't cheap in the big cities if you take into consideration the average salary and barely any financial aid to buy property. Besides, being a landlord isn't profitable enough given the initial investment because rental prices are heavily regulated. Also not good for reselling because price have been going down in the last years and it looks like it will keep going like that. Stocks options are heavily limited and also (obviously) regulated. A lot of people here are afraid to invest in stocks here anyway. with an estimated inflation rate of 60% people save money by buying dollar cash, crypto and classic bank instruments (fund investments and fixed term investments)

[onlyrealcuzzo]

IIUC, it's quite easy in Argentina to convert pesos to dollars and store them in an Argentine bank with a US correspondent bank - ditto for Euros and Yen.

There are many downsides to Tether. Why is it worth the risk in comparison?

Additionally, there's simply not enough money in Tether compared to the $80B to talk about. It's a distraction.

[Danidada]

Again, it's a matter of resources. Not everyone can travel to US and have the money to open a bank account there. Anyway to "easily" convert from pesos to US dollars (which you have to use some financial instruments which aren't trivial for the average citizen) you need to justify all your earnings which not everyone can do because people try to avoid taxes as much as possible.

For instance, most devs I know that work remote jobs for companies abroad, they ask for them to pay in crypto because if you try to get paid in the legal way you get 50% less off the bat in the forceful conversion from usd to pesos and then you get an additional 20-30% less due to taxes

[nailk]

> 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

[onlyrealcuzzo]

Why can't you use Wise to transfer money from USD to UAE?

[ulzeraj]

Nothing you wrote makes any sense. We are talking about stable coins. Where does speculations fits here? Also could you make an argument without making accusations?

[onlyrealcuzzo]

1. Stable coins make no sense for anyone outside of a handful of small, poor countries.

2. Stable coins make no sense for anyone who has meaningful wealth even in those countries because they have other, better options available.

3. The amount of money in Stable coins is >$100Bn - this is far more than what would go in to resolve any of these problems. Mentioning these problems is noise / a distraction.

4. The primary purpose of stable coins is for people to get in and out of / time trades in cryptocurrency (speculation).

Do you honestly believe people collectively parked >$80Bn in a shady company using it purely as a bank account - because that was really their best option? If not - then these talking points aren't really worth talking about. My whole point.

[hypertele-Xii]

The "stable" part of the -coin is all marketing. It's true while enough people believe it's true... and if at any point enough people disbelieve it, it'll be everything but.

[ulzeraj]

You are moving the target. I've asked how stable coins pegged to the dollar are considered speculative assets.

[whimsicalism]

Oh yeah, just hold dollars - what an easy solution.

[can16358p]

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]

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]

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.

[can16358p]

Got some in the family. But as a person who is interested in technology and a developer, I'm finding crypto more fascinating.

Long-term stability wise I think crypto will outperform gold anyway.

As a smart contract developer who knows a bit about the inner workings of crypto, I picked it.

But frankly yes gold would also be a good option. It has its own risks but safer than my country's currency for sure.

[cdiddy2]

its harder to send/receive, harder to verify authenticity, and harder to store gold coins compared to any crypto asset

[lupire]

Where can I download gold coins?

[pjc50]

You can buy small quantities of coins off dealers for a very modest spread plus the cost of insured postage. I have a few sovereigns at the back of a drawer from the 2008 crisis which have basically held their value. There's no magic to it, it's just a nice shiny object.

Converting back to cash at a reasonable rate is probably a lot harder.

(UK note: new gold is subject to VAT. Buy used.)

[ptero]

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.

[ulzeraj]

Try passing through border control on such countries while packing gold or expensive gold accessories.

[ptero]

Gold is one of the easiest things to smuggle: it is compact and can be easily melted, painted over, made to look like a cheap tourist souvenir, mixed with other components, etc. and then recovered at the destination.

That does not mean that it is trivial to smuggle gold out, but if you need to do so, the chance of success is pretty high. Much higher than smuggling out fiat money held in a government-regulated account during capital controls. My 2c.

[md_]

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.