[czhu12]

Can someone help me understand: in the Venezuelan example, wouldn’t holding USD be the same as an inflation hedge if you live in Venezuela?

In countries that have strict currency control so you can’t hold USD at all, wouldn’t those areas also prevent you from buying crypto?

Do Venezuela s banks not allow you to open an account for USD, but allow you to on ramp into crypto currencies?

[muzani]

I think the problem is also "Venezuelan banks". Bank runs tend to happen in these countries. A bank run is when people expect a bank to collapse, so they pull out money, forcing the bank into debt, and actually collapsing them. The patch for this is government insurance but Venezuelans likely don't trust their gov enough. Bank runs happen plenty in uninsured finance e.g. crypto too, but crypto exchanges today are more stable.

So crypto helps as an alternative method of holding money. You can buy/sell in USDT over some wallet or exchange. Your wallet is your own, in your device. The government can make it illegal, but that doesn't mean they can stop you. It doesn't collapse, but there's always the risk of being robbed, as with cash or jewelry.