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Comment by m00dy | Hacker News Reader

usd for cross border payments is a problem and speaking frankly it is a hugeeeee problem. Crypto fixes this.

Isn't something like wise.com a much better option for that? You have to trust only a single company instead of multiple potentially sketchy exchanges, and you are not exposed to crypto currency fluctuations.

As someone who uses Wise out of necesity: no, it's not better. Wise can freeze my account whenever they want. They can go out of business any day. Fees can change over time. Transfers can take a long time (ex. wire transfers can take several working days). Crypto is a far better solution in my experience.

All those problems also apply to the exchanges you use for crypto.

Unless you are thinking about a hypothetical future where you can directly use cryptocurrencies to pay your rent and buy your groceries.

>All those problems also apply to the exchanges you use for crypto.

Yes but they don't apply to using crypto for cross border payments, which is what the poster was referring to.

Transferring crypto across borders without exchanging to/from local currencies or USD is of course trivial. But it's also useless, since most people can't pay their rent with crypto.

ok, usd is terrible for cross border micropayments

To elaborate on the sibling comment, my understanding of Wise's mechanism from having used it is something along the lines of:

- they establish local accounts everywhere

- a transfer is you send money locally to their account, and then they send money from another local account to your destination

- they take some (small) mark-up over the actual rates

- they aggregate the many smallish transactions to exchange with optimal rates and fees for themselves, and probably do a bunch of stuff around mitigating risk of having too much float in a particular currency

It's a model that impressed me when I used it, relatively simple conceptually but solved a big pain point. Not sure that crypto adds much other than offloading risk (of exchange rate fluctuations) onto the person doing the transfer - I quite like that wise essentially bears that risk

Why is it a problem?

SWIFT system is taking too much time...(slow)

It is costly...(expensive)

It is not for micro-transactions...

You can get kicked out like Russia... (So, as a government, you cannot rely on it)

As a government, you don't have a right to vote in decision making or government in SWIFT system. (not inclusive)

Thanks for the info! Those mostly seem like problems that can be resolved without cryptocurrency.

Oh yes sure. The current system could also work without all the current issues... But who of the parties that control or profit from it now would want a change? Why give up control? Why renounce fees?

To change it, at least one competing system is required to put the pressure the current system. It will not change from the inside.

That is the best argument so far. The money system is a monopoly and competition fosters innovation. The problem is that cryptocurrencies are bad competitors.

There you go. For near instant, low fee, global cross-border payments the technology works for people in countries like Argentina, Nigeria, etc, and especially with stablecoins like USDC and that works worldwide. All the recipient needs is an internet connection and a wallet address or resolved wallet name like abcxyz.eth, or testing123.sol, for example.

So yes, it does indeed fix it.

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