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>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?

Argentinean here. That probably won't happen... for many years, at last. Programmers from my country start working for foreigners for dollares/any other non-meme coin that is no the peso. Anyone with 3+ years experience stops working for locals if they have a good english level and stop considering job offers in pesos (100% anual inflation as of now). What I'm trying to say is, the government can try to do that but it'll have to manage with only mediocre devs or spend a lot of money which... they don't really have.

> 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.

Cuevas are operated or are buddies with those in power.

Here's the thing: there is not a single rational actor in Argentinian politics who likes currency controls. It is a gigantic pain in the ass and a huge inconvenience for personal finances and so anyone who likes real money will use cuevas.

At the same time those people know that the alternative at the present moment is unlikely to be for the best; liberating the exchange rate just leads to people stashing money overseas, hyperinflationary spirals, even more difficulty servicing debt. More importantly, the various exchange rates allow for industrial protectionism where necessary (by benefitting imports of industrial inputs), populism for convenience (subsizing certain middle class consumer goods) and greater taxation of highly productive industries.

At this point the risk of walking all this back is too great for any single politican, side hustles would be lost, and the future would be even more uncertain. No one wants to pay the price.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.

It's basically a really crappy local Nash Equilibrium.

The cuevas existed before crypto though, so all that's changed is some backend implementation details of how they operate, rather than anything else. Users put their trust in cuevas to handle their money as much as regular people in other countries put their trust in their local bank.

The lack of uptake in crypto by regular people in Argentina underlies how much the decentralized promised cryptocurrency future simply isn't that interesting (for whatever reason) by regular people, even in a country where you'd expect people to be aware of the issues of fiat currency. The underlying fact seems to be that cuevas have managed to put enough trust in Binance to use it as their centralized platform, and that the underlying technology is so esoteric that "17-year old with a smartphone and the binance app" is all the implementation detail that's necessary for them. Smart contracts (to them) are just some esoteric money trinket, like folding animals out of dollar bills.

> the various exchange rates allow for industrial protectionism where necessary (by benefitting imports of industrial inputs), populism for convenience (subsizing certain middle class consumer goods) and greater taxation of highly productive industries

How complex is the Argentinian tax code? (Every democracy needs complex economic arrangements to reflect the balance of power. In America, we tend to stuff that complexity into the tax code.)

It is easier to feed a lion wearing a bunny suit, bathed in blood.

Argentinian here, we have maybe 100 taxes, a little more..

Complex and terribly executed; certain classes of businesses cannot pay their tax burden while remaining profitable.

It is a nightmare.

Thanks, I don't pretend to know how all that works in Argentina.

So cuevas are buddies with those in power? Wouldn't that mean they get extorted to stay in business? And if they don't come up with the requested bribes, or otherwise run afoul of their "sponsors" then they get shut down and the customers are SOL?

Yeah so there, and Brazil, there are for sure businesses that can handle the level of racket--but they're locals, and connected. Speaking the language is fairly critical. Being chill. Immigrants starting a business never get a toehold, the price doubles every time they pay it pretty much. Unless...unless you're magical or some shit, like unbelievable, next level. Oh you know who? Truecrypt author, Paul Le Roux, him.

Well if they shut down who else is gonna exchange your worthless pesos for hard currency?

I didn't mean all of them. Just the one you're unlucky enough to be with.

Hundreds of millions move through those, including importers and exporters from foreign markets with mafia connections. A figurative hornet's nest to disturb.

Ha! This brings memories. Growing up in Bulgaria, I was 6 years old in 1982, and I was begging my grandma's coworkers (he was their manager) to give me a dollar. Some of their husbands would drive trucks (T.I.R.) and would get ahold of foreign currency, but it was impossible to do so. In fact, the government has set up special shops called CORECOM - https://en.wikipedia.org/wiki/Corecom where you can "exchange" your "dirty" foreign currency for stuff not possible to buy anywhere else.

I wanted my $1 dollar to get a Kinder Surprise Egg (that, and empty cans out of coca cola, or pez were great for a kid to have).

Then regime fell, and in early 1990's all "corecom" eggs were now for sale everywhere... They were no longer that valueable :)

(From the wikipedia article, it looks like The Czechoslovakian's version was called Tuzex - https://en.wikipedia.org/wiki/Tuzex - lol - what names, someone should make a game with these names)

Poland also used to have this kind of shops - they were called Pewex https://en.m.wikipedia.org/wiki/Pewex

And they allowed purchases mostly in dollars. This shops were the only place where You could get high tech equipment that was produced by "rotten" west.

China had a more complex system into the mid 90s: They had special currency exchangeable for foreign currencies but de facto it was only for foreigners (who else had foreign exchange?). There were places that only took these Foreign Exchange Certificates: hotels for foreigners, tourist traps, some speciality shops etc. They were denominated in Yuan but these places that took them of course charged foreigner prices too -- like a pack of cigarettes cost about much more than you would pay in the street.

Some local people were quite eager to get FECs and would exchange them at better than 1:1 so they could buy something normally unavailable What people really liked was if you bought something with them (like cigarettes) -- you'd get change in regular renminbi.

There were other good techniques for soaking the foreigners. Two I particularly liked: Egypt used to require that visitors spend at least $75 (maybe $225 today) worth of Egyptian Lire per day. You had to buy that much local currency at the airport to enter the country (based on how many days you planned to visit). But the best part was when you left you had to show receipts for the things you'd paid for and if they didn't add up to enough they'd tax you the difference before you could leave!

The sneakiest system was in Sri Lanka: the currency was not convertible so you could only buy rupees when you were physically there. Then when you left of course you had some cash left, but when departing flights left the banks were closed. There was a huge transparent globe collecting money for a children's charity. Naturally it was full of rupees (and a tiny amount of foreign money).

I refused to do this and later sold my walletload of Sri Lankan Rupees to a coin collector shop in Singapore for some terrible exchange rate. Just out of principle.

> It means that cuevas are vulnerable to surveillance and control.

Oh but the "change money" people were no less vulnerable to surveillance and control - the communist solution to this very communist problem that they posed was to use them as a source of intelligence.