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Comment by ulzeraj | Hacker News Reader

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.

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

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

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

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

Oh that's a different question IMO. Crypto is making it easier to bring dollars from abroad so I get it does lower the black market cash dollar's prices in that sense. Big international crypto exchanges like binance aren't yet regulated here so technically the crypto world IS part of the black market anyway

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.

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.

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

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