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Comment by wmf | Hacker News Reader

The other legit use for stablecoins is allowing people in Venezuela, Argentina, etc. to hold US dollars while the US government pretends they don't know this is happening. (Officially the US does not encourage dollarization of other economies against their will.) I agree that a centralized US dollar CBDC that isn't run by scammers would be a simpler way to do this.

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This is basically the valid use case, yes. It turns the bitcoin goldbug inflation paranoia on its head: the stable currency is defined to be the US dollar, and an elaborate proxy system allows people to access that stability when their local government doesn't want them to. Circumventing exchange controls and so on.

Although the current government is having a good go at reducing the value of the currency, it's barely budged on the chart.

> Circumventing exchange controls and so on.

This is the only new thing. Maybe.

Also it takes on the mobile phone money providers with direct 'dollars', which means it basically becomes a currency denominated bank.

You think the same system that chose to bail out the banks in 08 should be fully responsible for our financial future? I believe a more distributed financial system would provide more stability for all of us. The GENIUS Act establishes some very strong standards that I believe will strengthen the economy, the dollar, and enable more people to enter the financial services industry in a competitively healthy way. A scammer would have a hard time 1:1 backing their stablecoins with bonds and equivalently stable assets.

That system is still deciding your financial future

i use one of the largest credit unions in the usa (grown through m&a over the last twenty years). their ability to follow instructions is at best at tech-intern level. their fees are incredibly fat and their people exhibit serious cya and complacency in almost every interaction. my confidence is at an all-time low in their competence.

I don't care about them; the big banks are still deciding how things work, even with regards to crypto

i still find the original idea of credit unions appealing: ie a small local organization focused on outserving a specific membership who are naturally bound together by meaningful preexisting ties.

the trouble seems to come when the credit union decides it needs to “scale “ sort of defeating the original thing that made it any good. perhaps that comes from just greed (ie the ability to charge fees on a larger customer base) or maybe it’s a requirement of the costs of providing an ever-widening array of newly “expected” services.

I mean i enjoy the idea as well, it doesn't change that our socioeconómico (i'll leave this autocorrect lol) system is controlled by the giant financial institutions, and the moves they're making with regards to crypto are only to ensure their existing positions

yes i love the ideas of crypto. but the irs checkbox about owning it gives me pause.

Despite its "mismanagement", people in shithole countries seem to prefer USD not EUR/CNY/RUB/XAU.

I do hope regulation drives Tether out of business.

That's thanks to the legacy of Bretton Woods and other things like the petrodollar. It's not a result of our monetary policy or output. The US is good at war and has the benefit of convenient geography. Those are the things that hold up the hegemony we see today.

The reason they don’t want a CBDC is to be able to collect interest on behalf of the people holding the currency. If the state launches a blockchain CBDC, the state will profit. It’s too much money not to corrupt the most powerful people on the planet.

It's not just places with hyperinflation. It's any country. Why should anyone be restricted from holding USD or have to pay crazy fees to buy dollars?

> I agree that a centralized US dollar CBDC that isn't run by scammers would be a simpler way to do this.

I don't think it's a stretch to imagine that the government would ban all other stable coins and strictly control what "valid commerce" is allowed to be done with the centralized coin (see Operation Choke Point)

https://en.wikipedia.org/wiki/Operation_Choke_Point

If a country does not allow their citizens to exchange currency, then this is as good as a black market and comes with the same risks as obtaining currency through any other black market means.

Carrying around or storing piles of foreign currency is much riskier than having a USDT wallet. You also cannot fly to another country with cash.

crypto off-ramps & on-ramps are expensive though.

check binance & other markets - e.g convert USD 10 to USDC

Expensive relative to what? When people are rescuing their hard-earned savings of 200k USD out of a third-world country, they would be happy to pay even double-digit per cent commissions, and crypto is much, much cheaper, faster and safer than all other available options.

Of course, if you're a US citizen transferring 200k USD from Chase to Bank of America, crypto doesn't make any sense.

Who are these people in 3rd world countries that have 200k USD cash? You make it sound like they've scrounged to make it happen... But its far far more likely to be people either trying to wash the money or they were from less than legitimate sources.

Definitely not lower class people like you seem to imply (or perhaps I'm just reading into it?)

I only know the situation which touched dozens of my friends and acquaintances. Say, you’re a relatively successful software professional in Russia, who has a small apartment and a car in a big city. Then the war with Ukraine starts, and all Russians are automatically sanctioned and blacklisted from the international financial system. You don’t want to make drone software or facilitate black-market oil trading, so you decide to sell everything and leave the country with your wife and kids to work elsewhere.

What, in your opinion, are your options for transferring abroad the cash you got from selling your hard-earned assets?

His entire point is that Russia is not a third world country.

In Argentina, the money changes pay more pesos for 100 dollar bills than 20 dollar bills, and won't accept money that is too beat up. Definitionally it's not the poorer people who can buy dollars in large denominations.

He didn't imply he was referring to "lower class people." He's referring to people who have savings in countries with volatile currencies. Even for $100, having a stablecoin reserve can be a saving grace. Especially when trying to find asylum elsewhere.

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