I'm not sure about Argentina specifically but from most of these cases I know personally they don't even use Binance for conversion, there are local money changers that trade hard currency for depreciating (t)rash, this was true even before Bitcoin & co when people still kept paper dollars under their mattress or in the bank. Those who think this will go away with regulation and bans are even more delusional than the folks who thought that alcohol or drugs can simply be banned and all will be fine. Financial security is a basic need, it's part of our drive for survival.
Binance is mostly used by speculators/retail traders, not people who actually use cryptocurrencies. I get the joke that Bitcoin people say everything's good for Bitcoin, but in this case it may actually be true. Binance isn't a good company and people have been concerned about their huge market share in exchanges for a long time. Binance isn't pro Bitcoin, Ethereum and other such networks. They heavily push their own coins and solutions which aren't decentralized. It's only slightly better for the ecosystem then FTX probably, in the sense that they're not outright stealing user funds - at least that we know of.
I guess the next move would be opening offshore accounts to accept payments.
And that's before taking taxes into account. When taking taxes into account, somebody who is paid 10k will basically end up with 3k USD, probably less.
Additionally, and this happens in every country, SWIFT takes days and fees are really expensive. Crypto is almost instant and fees much much lower.
Of course that only works if the whole crypto hassle is still better than working with local banks.
Incorrect. Argentinians do that because taxes are incredibly high, and if you earn in USD you must sell it at the official dollar rate (less than half of the real rate), and you can't even buy the dollars you sold back because there's a cap on how much USD you can buy per month (I think it's 200USD). Argentinian devs LOVE crypto because they love evading taxes (justifiably or not)
Describing it as mere tax evasion interests is a bit of a simplification. During Corralito accounts were frozen to the point they could often barely be drawn on. Whether you want to blame that on the bank or not, the end result is people end up not trusting the banks...
aka
bank -> exchange/crypto (in/purchase)
then sell crypto on exchange, transfer to bank
In the end it's a circular economy in a way, for anyone cashing out USDT there is someone cashing in (assuming the price stays constant). Right now we match them up with marketplaces and SWIFT transfers, but people running around with suitcases of cash would work just as well.
You have to have an awful lot of trust that this briefcase full of cash will be available to train back should you ever want it again.
A few years ago there were valid technical reasons for why crypto is not being adopted by retailers in the form of slow transactions throughput and high fees. Nobody wants to wait a minute and spend $10 for their transaction to go through. These technical reasons no longer exist. L2s are extremely fast, secured by L1, and fees are small. And with the upcoming sharding upgrade Ethereum is going to be even more efficient. From a technical perspective, you could now accept USDT (or any other token) and have verification be about as fast as most card payments, with lower fees. But all of these are relatively recent developments (~1-2 years), and it will likely take a few years before all this technology trickles down into real-world adoption.
a) It is too volatile.
b) Consumers are not demanding it.
Not sure what the magical solution to either is that hasn't been tried before.
2) True, I think the negative image and bad UX of retail crypto is a big reason of why retailers have not adopted it. I'm not sure this will continue forever though.
3) I would add that taxes are another reason retailers are vary of adopting crypto. Depending on the country, dealing with crypto taxes is a pain, and not worth the effort.
The magical solution? It's time, competition, and the free market. If crypto is truly cheaper and easier to deal with, startups will push it onto retailers to replace credit card incumbents. But these things don't happen overnight.
Or are there "black market" exchanges that would accept a transfer into their digital wallet and pay out cash, so these Argentinians can buy bread?
To put it in perspective, prior to crypto, people would take their entire paycheck and savings and immediately buy pallets of bricks for the same purpose. They would fill their houses and yards with these bricks because they held value better than the currency, even after accounting for the cost of trucking them around
The interesting thing I think is what happens to those USDT after the payment?
At some point you are going to want to cash out your crypto to USD.
Which is a regulation point that will need to implement KYC/AML.
I’m sorry the truth doesn’t match what you want but this is reality I’m speaking of.
I am talking about the larger financial transactions that actually underpin the global economy.
And for those crypto very much has borders.
And what do those developers pay for in USDT?
It's Argentina. Read about its economy. To use it as an example is somewhat disingenuous. The government rations foreign currency in something like a few hundred USD per month per person I think. If cryptocurrency is another way to work around legal inconveniences, so what.
They can certainly pass equivalent regulations on BTC. Good luck enforcing them, though.
If you mean the country as a whole, then yeah, the solution is obviously different.
But if you mean some random person stuck in that country, who have zero control over its economic policy - then yeah, crypto actually solves the problem that government creates.
And Argentina is far from unique in that regard. Most people in the world live under oppressive governments.