[HN Gopher] Argentina's currency exchange black markets
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Argentina's currency exchange black markets
Author : mrzool
Score : 33 points
Date : 2022-09-10 21:08 UTC (1 hours ago)
(HTM) web link (devonzuegel.com)
(TXT) w3m dump (devonzuegel.com)
| gumby wrote:
| Decades ago when the Rupee was much more tightly controlled, a
| black market flourished for currency exchange. Since I was mostly
| visiting family I didn't spend much. At one point I did some
| traveling on my own and had plenty of rupees in my pocket.
|
| In a foreigners' hotel lobby I ran into a kid who was eager to do
| a currency exchange. He was really good at it too: he had a
| reflexive response for any objection ("I have enough rupees" "But
| the bank will only give you 20 for a dollar -- I can give you
| 50").
|
| Finally he asked, "Don't you have a exchange market for dollars
| in your country?" I answered "In my country dollars are just
| money" "Yes, same here, so you don't need to go to a bank to
| change them for rupees".
|
| I replied, "In my country I go to the shop to buy a drink and
| give dollars to the shopkeeper. He gives me my change in dollars.
| There is no exchange rate into any other currency"
|
| _Finally_ he didn 't have an immediate response. He looked a bit
| shocked that there might be a place where people simply
| transacted business in dollars. And why shouldn't be be
| surprised? He didn't live in such a place and in his experience
| all foreigners seemed to use these "dollar" things to buy or sell
| rupees.
|
| Anyway that pause gave me a way to jump out of the conversation
| and make my escape.
| hahaxdxd123 wrote:
| I know some US startups that hire Argentinians (Scale AI, etc)
| and pay them in USD-T or USD-C. Not sure if they pay any taxes in
| the US, but they certainly don't pay the income tax or take the
| currency conversion haircut in Argentina. Pretty good deal.
|
| Still, these people want USD, not really a crypto. I figure some
| lost their shirts in UST.
| IMTDb wrote:
| How is Argentina supposed to pay for public services, teachers,
| doctors, education, roads, etc if the conception is that a
| "Pretty good deal" means the country does not get any tax money
| through competent, employed individuals who are supposed to be
| the one supporting those costs ?
| notch656a wrote:
| All those things can be acquired privately. It is possible to
| buy things without using tax money.
| colechristensen wrote:
| Argentina has trade deficit problems. Black markets and
| cryptocurrencies don't fix these problems just push the burdens
| of them onto other people who can't as easily get around the
| legal currency framework.
| k__ wrote:
| Don't know about their trade deficit, but I talked to a few
| people living there and they said, crypto is the only way for
| them.
|
| Their own currency is unusable, and the government limits how
| much dollar they buy.
| msoad wrote:
| This article is pro-cryptocurrency but they fail to see that in
| some spans of time (recently) Bitcoin or other cryptocurrencies
| lost more value than Argentine Peso.
|
| Again, cryptocurrencies are not solving anything.
| k__ wrote:
| DAI and USDC are pretty stable, especially if in the face of
| the recent crashes that took BTC and ETH down.
| notch656a wrote:
| DAI is imminently dead by .gov pulling a Tornado Cash on all
| the underlying centralized collateral locked up in DAI.
| JumpCrisscross wrote:
| > _by .gov pulling a Tornado Cash on all the underlying
| centralized collateral locked up in DAI_
|
| I doubt the U.S. would simply blow up stablecoins. (Unless
| _e.g._ the Kremlin is buying Iranian munitions with it and
| nobody does anything to stop it.) That said, coming
| regulation _will_ likely require elements of KYC. That
| could result in enforcement actions or users in back-of-
| mind countries getting locked out.
|
| All of which sidesteps dollar stablecoins being reliant on
| the dollar for their stability, not anything special about
| crypto.
| notch656a wrote:
| What's the value proposition of DAI with KYC?
| Karrot_Kream wrote:
| There are plenty of folks who are comfortable with KYC
| but also want to use dollars as cryptocurrency.
| [deleted]
| seibelj wrote:
| How to understand central banking and the fiat currency system:
|
| All money is a coin created by a national government. USD is
| America Coin, Sterling is UK coin, Yen is Japan coin, etc.
|
| Within the boundaries of the nation, everyone uses the national
| coin.
|
| All goods and services are produced somewhere. If produced and
| consumed in the same nation, the same coin is used.
|
| Things get interesting with international trade. All countries
| cannot produce every single last thing they want. So they have to
| purchase from other countries. And the other countries require
| the use of their own coin when buying their goods and services.
|
| Exporters get paid in their nation's coin, which becomes an
| important source of foreign currency for the central bank /
| government. More exports = more conversion into the nation's coin
| = more forex. If a car exporter sells cars, the central bank will
| facilitate payment to them in local coin, but the central bank
| will take and store the forex.
|
| Things get very interesting (and corrupt) with imports. In any
| given nation, there is only so much forex. If you try to acquire
| more forex (like USD) by printing more local coin and then
| trading it for USD, you will get inflation. So countries with
| well managed central banks try and avoid this. So who can use the
| limited USD to import what they want becomes subject to political
| will. Often politically favored firms get access to the USD to
| buy the goods and materials they need, which they then sell
| locally. If there simply isn't any more USD to buy stuff,
| competitors can't enter to be an importer.
|
| As the most important good in the entire world - oil - is traded
| almost exclusively in USD, every country has an everlasting and
| unquenching thirst for USD. This gives the US enormous power, as
| it can print more money with way less risk of inflation than
| other countries can. It also lets the US get ever cheaper goods
| and services from abroad with such demand for a good that takes a
| mouse click to produce (USD).
|
| Bitcoin (and other cryptos if they can be successful) is
| extremely dangerous to this model because it is not controlled by
| any government. It is exactly like the old gold system, except
| way better because you don't need to protect the gold with
| soldiers and vaults, move it with huge ships, and so on. It's
| gold on the internet.
|
| If goods start being priced in Bitcoin directly, it will be akin
| to the old global system of everything being priced in gold.
|
| But in general, think of fiat money like coins and central banks
| as a single centralized validator node that has sole authority to
| mint new coins.
| JumpCrisscross wrote:
| > _the most important good in the entire world - oil - is
| traded almost exclusively in USD_
|
| This isn't true and hasn't been for decades. Oil is just a
| special case of the far larger American import wallet, the real
| underpinning--together with its capital markets' strength
| [1]--of U.S. dollar hegemony.
|
| [1]
| https://www.bloomberg.com/opinion/articles/2022-03-16/saudi-...
| setgree wrote:
| This essay was previously published elsewhere on 8/13:
| https://www.freethink.com/technology/crypto-argentina-black-...
| AlbertCory wrote:
| In 1982, I went to Czechoslovakia (this was before the divorce
| and before the fall of the Wall), and walking around the streets
| of Prague, people constantly whispered to me, a visibly foreign
| person, "Change money? Change money?" Dollars or German marks
| were what they wanted, and I could have gotten a much better
| exchange rate than the official one, if that was what I wanted.
|
| Now? The author's comment that most people use a _cueva_ to
| handle the crypto for them, rather than managing it themselves,
| is a real-world datapoint. It means that _cuevas_ are vulnerable
| to surveillance and control.
|
| > The way I explain this to myself, it seems that the key
| characteristic that draws Argentinians to these relatively
| centralized cryptocurrencies is that the government doesn't
| control them, rather than being completely decentralized in a way
| that no one controls them.
|
| The government doesn't control them _now_. What do you bet there
| are armies of programmers working for the government, figuring
| out how they can?
|
| So if I lived there, I'd probably be using crypto, too, but I'd
| always be afraid it's going to vanish someday. Not by the
| government devaluing the peso, which Argentines are used to, but
| by some unforeseen technical snafu.
|
| So I'd probably spread my bets around, having some US $100's,
| some bricks, and some of other coins, making sure not to have all
| my eggs in one basket.
| verisimi wrote:
| > Argentinians have also learned to not trust banks, even with
| accounts denominated in other currencies. In 2001-2002, the
| government enacted something called "el corralito", shutting
| Argentinians' access to their bank accounts for almost a year.
| When they could finally extract money again, they found that (a)
| their USD deposits had to be exchanged for pesos and (b) pesos
| had lost 2/3 of their value.
|
| That couldn't possibly happen in the West. Its only those silly
| Argentinians that have to worry about this sort of stuff...
| right?
| Cupertino95014 wrote:
| If you look at inflation numbers between 1968 and 1981, it did
| happen in the US -- just not by 2/3.
|
| Those sorts of massive bank controls, though... no, not yet, in
| the US anyway. Let's not talk about Canada.
| tomjakubowski wrote:
| I always considered Argentina part of "the west" - it's in the
| western hemisphere and the common language is Spanish, along
| with other cultural connections to Spain. What definition are
| you using?
| [deleted]
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