It's completely legal under the law called 'might is right'.
Forget about exchanges. If a random business anywhere in the world buys a product from a factory in a neighbouring country and settles in dollars, this applies.
Why wouldn’t it be? The exclusive purpose of crypto is to circumvent existing regulation for financial transfers. The US government would obviously not be so rosy about that idea, nor would it recognize the “sovereignty” of crypto such that its laws would not apply.
Because I was under the impression that once you buy certain currency, you're allowed to do with it whatever you want. Certainly if you're outside of the jurisdiction of the entity that issues said currency.
sure you can. if you and your friends start to issue dollar IOUs to each other, it's as real as the ones you get from a US bank when you get a mortgage.
the problem is you can't access global liquidity pools easily with the former. and if you're a B2C company and want to sell to US customers, then the US claims jurisdiction.
hypothetically if folks in Argentina start to use dollars in their banks and only touch physical dollars (as the interface between US and Argentinian money circulation) they are still using real dollars without touching US accounts.
their banks can form their own interbank exchange, they can even make a central bank that does "open market operations" (can buy and sell things on this exchange from pure air - like the NY Fed's trading desk which is basically the executive manifestation of the FOMC), but of course it'll have a mighty hard time to get price stability. not to mention that the US wouldn't be happy
Forget about exchanges. If a random business anywhere in the world buys a product from a factory in a neighbouring country and settles in dollars, this applies.