[golergka]

> Objectively nobody actually uses this stuff.

Spoken with a privilege of a first-country citizen with a working banking system. I personally know dozens of people who use crypto for their main purpose: to transact. Without it, they wouldn't have been able to earn their living or have any access to their money.

[dayve]

I am based in Nigeria, a ‘third-world country’, I work remotely for a company domiciled in the US and get paid in Stablecoins (USDC & USDT). Crypto has been a life saver for me. Before that, one alternative was to get a USD account in a local bank & get paid via Western Union. The challenges are numerous. To setup a USD account locally takes a long time & multiple requirements. Assuming that hurdle is crossed, the more challenging issue is how restrictive Central bank policies are. In an economy with high inflation & parallel market rates for USD, there’s an incentive for the government to retain as much USD in the economy due to poor trade policies preventing $ revenues from coming in. Withdrawal limits have been reduced over the last 2 years alone, & the flexibility to make $ payments is hindered by low transaction limits with a USD card ($15 per transaction). To navigate this, I tried creating a virtual USD bank account with a local Fintech, with which to receive salaries. However these virtual accounts can only receive payments from US accounts (via ACH transfers) so can be restrictive. The most seamless solution to my problem has been to setup a crypto wallet. In minutes I receive my salary and can spend any amount, whenever I like. Plus, it makes it easier to save in USD, avoiding the local currency devaluation (The Naira has fallen 52% in the last 7 years under the current regime). So speaking as a ‘third-country citizen’, crypto provide a far more effective banking system.

[kkielhofner]

I'm not questioning your experience but this is very strange to me.

I've worked with contractors based in Brazil, Turkey, and other countries likely categorized as "developing" and the payment process doesn't look any different than when I work with international contractors in places like Germany.

Many of them use Wise (formerly TransferWise) and looking at the pricing for Nigeria it looks completely reasonable - sending money has a 0.41% fee and receiving it is free. This fee includes reasonable things like a website non-crypto enthusiasts can actually use, customer support, fraud protections, etc. For countries with unstable currencies, massive inflation, etc Wise allows you to hold it in over 50 fiat currencies (including USD).

Given that I've had an interest in crypto for many years at this point I've seen online descriptions like yours so I've asked the contractors I've worked with "Why not crypto?". They all tell the same story - that services like Wise are perfectly usable and with extremely reasonable pricing all things considered. Wise even provides the sending of invoices that I (as the client) receive via e-mail and can pay in a few clicks. The most important thing to people is actually getting paid and it's a well known fact that reducing friction around payments is the best thing you can do (I've been a contractor as well).

Note this is technical/development contract work. I can't imagine people in non-technical fields getting an invoice asking for payment in crypto stablecoin and them spending the time, energy, and resources to wander through that maze to pay a contractor, service, etc instead of running their business. Frankly I'd use a different contractor and I'm very crypto literate.

[dayve]

Wise used to be a great option to transact in, 2-3 years ago. The main challenge with Wise however was the exchange rate used to convert USD received to the local fiat currency. In Nigeria there are two exchange rates - the first at an official rate used by banks, & the second a parallel rate used by the black market (including Bureau de Change operators).

Today if you Google the ‘official’ exchange rate for the dollar to Naira, you’ll see a ~445 Naira to 1 USD. As an individual there isn’t anywhere I can buy dollar at this rate, because it is exclusive to banks, select licensed money operators & politically connected high-net worth individuals. However money services like Wise convert my dollar at this official rate. Considering that the parallel market rate today is 745 naira to 1USD, I will be losing a huge amount of money by receiving money with Wise. The only workaround will be to get a virtual account on Wise & send USD to a local money merchant, who then exchanged at this parallel rate. But such virtual accounts aren’t accessible to people in Nigeria, due to regulation. [1] For context, the Central bank of Nigeria released a circular a while back explicitly stating Wise as a non-licensed entity.

There are other options apart from Wise. But the trade off is loss of money, as compared to what’s available on the parallel/black market.

[1] https://www.reuters.com/article/nigeria-money-idAFL1N2IX1BM

[kkielhofner]

Thank you for the detailed education of the issues specific to Nigeria! But I'm still curious - can you explain how crypto transfers aren't subject to the same issues getting to Naira, the traditional banking system, etc? Getting solid data on the adoption of crypto for real day-to-day payments in Nigeria (or anywhere) is pretty difficult.

Genuinely curious.

[dayve]

Crypto transfers aren't subject to these issues because they aren't regulated. For instance, cards (Visa, Mastercard & Verve) can't be used to deposit on these exchanges because they'll have to be processed by a fiat operator, which usually requires a license. Because the government has banned the use of crypto, any entity caught wanting will have their accounts frozen. This also makes it really hard to deposit money into these entities by anyone. They can easily be blacklisted because they have accounts in their names. I used to work for one of such entities. I've also had my bank account frozen by the Central Bank of Nigeria for withdrawing naira that was sent from said 'blacklisted' entities.

Because these crypto exchanges are P2P based (e.g. Binance P2P), I can exchange my USDC for Naira that's deposited directly to my account. Because these are individuals, it's hard for the government to isolate bank transfers that are made for the purpose of crypto. For caution, people making such transfers tell each other not to add a description with a crypto-related word to these transactions.

Adoption for real day-to-day payments in low-volumes (like paying for groceries at a shop) is quite low, but high among high-volume merchants who import/export goods and are in dire need of USD liquidity and ease of payment across countries. Tough Central Bank policies give them an incentive to find the best rates & transact with lesser barriers. There are no official figures/solid data, because all that activity happens in informal channels (like P2P).

[lambdadmitry]

I don't understand though how do you explain those transaction to your tax authorities and pay taxes. Surely it can only be so long that you can get massive (by local standards) and fairly constant salary month to month and not get them interested in the source of funds?

[valcron1000]

As someone in Argentina, let me explain my situation:

As you pointed out, not many employers are willing to pay directly in crypto, that's why a lot of contractors - myself included - are willing to use platforms like Payoneer, Wise, even Paypal if there is no other option.

The missing part of the story here is how contractors in a developing country with currency controls, high inflation, poor banking infrastructure get the money -out- of those platforms. Most of the time you just cannot do it legally, so you end up "selling" your Wise/Payoneer/Paypal balance for the equivalent in the local currency. This is usually against their ToS and which can result in your account getting banned, losing access to your money (that's why it's advised to -not- leave any significant amount of money on these kind of platforms).

With crypto I also need to deal with black markets (which are always growing down here) and some business are starting to accept crypto directly (mostly tech-related busines). But, unlike these platforms, I actually have control over my money (it cannot be "confiscated" by my wallet unlike my Wise balance), fees are usually lower (ex. Payoneer results in a ~3.5% fee, Paypal ~10%, Wise ~1%, while in crypto - lets say BUSD - fees are mostly flat at around 1/2 USD at most), and market liquidity is higher (it's -a lot- easier to sell USDT/USDC/BUSD/DAI than your Paypal balance).

[simiones]

I am very curious of two things:

1. Are you actually transacting with others directly in USDC/USDT? I.e. are there shops where you actually buy things through your crypto wallet, or are you converting to USD/Naira and using that?

2. Are you self-hosting that wallet, or is it actually an account on some exchange?

Either way, I doubt that working remotely as an employee of US companies is a very common way of life in your country, so I don't think this supports the GP's point as much as it appears.

[dayve]

1. I transact with others in Naira, crypto is hardly a payment option in shops here.

2. I use an exchange to receive USDC, which mean I don’t need to worry about gas fees while self hosting

To get Naira, I convert from the exchange in a P2P marketplace where I can get competitive black market rates from other individuals.

[vlovich123]

> The Naira has fallen 52% in the last 7 years under the current regime

How much has crypto grown in Nigeria? Is it possible that the migration to crypto / loss of faith in the local currency in lieu of USD is what’s actually behind the collapse vs government policies themselves?

[lottin]

It's usually a combination of both. When the local currency is unreliable, as a result of bad government policies, the locals will try get hold of a stronger foreign currency. They will sell the local currency to buy the foreign currency, which will contribute to the depreciation of the local currency, which in turn will make it even less attractive, prompting more people to sell, and so on so forth.

[moritonal]

Neat, in what kind of industry/countries have you seen this?

[golergka]

Russia, Ukraine and refugees from these countries all around the globe.

[dgroshev]

Russia doesn't have refugees, it has a tiny number of people seeking asylum after protesting against the regime. Middle class Russians fleeing conscription are not exactly comparable with people seeking refuge from Russian bombs, are they?

[michaelscott]

Uptake in Zimbabwe, Nigeria and a number of other African countries has been climbing

[freejazz]

Maybe people should be clear that they meant it'd only be useful in the context of living in the "third world"?

[tgv]

Strange. How did anybody live there before 2015?

[arcticbull]

Ah yes here comes the privilege argument to derail legitimate discourse. You love to see it.

Your first approach should be a Wise multi-currency account.

Where Wise doesn't work the only thing that makes any sense are stablecoins from a proper issuer, like USDC (definitely not USDT). These are of course issued and controlled by centralized entities, making them antithetical to the very principles of crypto. They may as well be private scrip CBDCs.

Any decentralized/floating-rate coins are utter garbage for folks without access to meaningful banking systems in so-called third-world countries due to the volatility, embedded systemic leverage, high fees and potential long transaction times. These folks are the least able to stomach the 90% drawdowns (and 100% rug-pulls) we've seen market-wide. Frankly, I think the Turkish Lira has outperformed every major cryptocurrency for the last year.

What these people need are actual privacy-preserving CBDCs, of which there are exactly zero in the market.

Please put away the faux privilege defense. Folks of any level of privilege are able to comment meaningfully on the fitness of a technical system for purpose. Allow their arguments to stand on their own merits.

[michaelscott]

Although I agree that the expression that OP made maybe wasn't the best, they do have a point.

> Your first approach should be a Wise multi-currency account.

Excellent example; Wise is not available for account setup in the vast majority of developing countries, so if that's your solution it's already a failure. But why? For the most part it seems to come down to banking and currency regulations, which is exactly what cryptocurrency (at least Bitcoin) was designed to circumvent. I'm not even talking about countries that are essentially kleptocracies and have moulded their regulations to fit that structure, or remittances that have become such a large industry they practically power the GDP of a number of extremely poor countries.

> Any decentralized/floating-rate coins are utter garbage for folks without access to meaningful banking systems in so-called third-world countries due to the volatility, embedded systemic leverage, high fees and potential long transaction times.

I'm not sure this argument still holds with all the defi options today, but if this is an improvement on the status quo I guarantee people in third world countries will use it in spite of its deficiencies. A central bank that throttles access to alternative currency options will practically shut down the use of existing banking infrastructure, whether it's good or not.

[LegionMammal978]

> Wise is not available for account setup in the vast majority of developing countries, so if that's your solution it's already a failure.

Do you have a source for this? The closest thing I can find is this list of countries where it isn't allowed [0], which includes several developing countries but certainly not the vast majority of them.

[0] https://wise.com/help/articles/2978049/which-countries-can-i...

[michaelscott]

Personal experience attempting to open an account with them while living in a developing country. Granted, this was about 5 years ago so the situation may have changed since then.

[arcticbull]

> Wise is not available for account setup in the vast majority of developing countries, so if that's your solution it's already a failure.

I was ranking options from worst to best. Best would be something like Wise. Second-best would be a stable coin from an issuer that isn't an outright fraud. And last would be any floating-rate coin.

Last year Bitcoin literally hit transaction fees of 20% of the GDP per capita of the worst-off countries and then fell 75% in value. I wouldn't wish a system like that on my worst enemies let alone of people I claim to be trying to help. It was massively outperformed by the Lira. I can't even find one that wasn't outperformed by the Lira. It may have been designed to meet this need but it utterly failed by any measure.

USDC is a strictly better option. And better than that would be a USDC like system that preserves privacy issued by a central bank.

> I'm not sure this argument still holds with all the defi options today.

Literally 10% of the entire TVL of DeFi was lost last year to hacks and shows somehow no sign of slowing down.

The real privilege is believing that poor folks are as risk tolerant as you are in a first-world country and that this is somehow a better solution than a nice home-grown payment network like M-PESA.

It’s like a cocaine-powered ruined fresco of the financial system.