Moving money internationally • Hacker News Board

Re: Moving money internationally

#101

Post by pavlov » Thu, Mar 03, 2022, 4:44 AM UTC

glerk wrote: post #77

For those saying that crypto is useless, here is a great use case. Authoritarian governments are currently preventing individuals from moving their property across borders. Crypto fixes that.

But the catch-22 is that, if it actually becomes popular for fixing the problem of currency controls and sanction lists, governments have the ability to impose a lot more control on crypto exchanges to prevent this kind of use.

Maybe at that point there would be two worlds of crypto: you can trade it on the above-the-board exchanges, but can’t move those coins out onto the blockchain in any meaningful amounts. Or you can have it on the blockchain, but you can’t convert it to USD/EUR in any meaningful amounts unless you find a private buyer.

In fact these separate worlds already exist — it’s not like most Coinbase users ever interact with the actual chains, they just trade inside Coinbase’s SQL database. But a lot of the appeal of crypto is about theoretical possibilities, and government regulation can put a real damper on that enthusiasm.

Re: Moving money internationally

#102

Post by mmastrac » Thu, Mar 03, 2022, 4:47 AM UTC

pavlov wrote: post #101

glerk wrote: post #77

For those saying that crypto is useless, here is a great use case. Authoritarian governments are currently preventing individuals from moving their property across borders. Crypto fixes that.

But the catch-22 is that, if it actually becomes popular for fixing the problem of currency controls and sanction lists, governments have the ability to impose a lot more control on crypto exchanges to prevent this kind of use. Maybe at that point there would be two worlds of crypto: you can trade it on the above-the-board exchanges, but can’t move those coins out onto the blockchain in any meaningful amounts. Or you…

Isn't that equivalent to dirty/clean USD? Except that laundering becomes pretty much impossible due to the blockchain.

Re: Moving money internationally

#103

Post by jacksonkmarley » Thu, Mar 03, 2022, 4:48 AM UTC

glerk wrote: post #77

For those saying that crypto is useless, here is a great use case. Authoritarian governments are currently preventing individuals from moving their property across borders. Crypto fixes that.

The main crypto exchanges blocked the accounts of sanctioned individuals, does that hamper their ability to use their crypto assets constructively?

Re: Moving money internationally

#104

Post by virgilp » Thu, Mar 03, 2022, 4:55 AM UTC

glerk wrote: post #77

For those saying that crypto is useless, here is a great use case. Authoritarian governments are currently preventing individuals from moving their property across borders. Crypto fixes that.

But it does not - or, to the extent that it does, it only does as a yet-unclosed loophole.

If crypto is not currency, it needs to be converted to currency before use and as such can trivially be blocked with KYC rules at conversion.

If crypto desires to be a serious currency, it needs to greatly improve efficiency and stop being deflationary.

(Funnily enough, Tesla accepts dogecoin but not USDT, so maybe I am wrong with the second requirement; but maybe not - it's likely just a gimmick in this case)

Re: Moving money internationally

#105

Post by sailfast » Thu, Mar 03, 2022, 4:58 AM UTC

glerk wrote: post #77

For those saying that crypto is useless, here is a great use case. Authoritarian governments are currently preventing individuals from moving their property across borders. Crypto fixes that.

They're not preventing movement of physical currency - they are preventing use of the existing network and systems to easily move debts around so that it is exceedingly difficult and you have to move physical currency instead of bits / IOUs.

Maybe a distinction without a difference to some, but it makes sense that a country that bucks the consensus of a number of member nations would be excluded from a consortium of institutions like this. (Leaving discussion of disparate impact and whether this actually achieves national goals for another forum)

I don't personally see a huge distinction between crypto and global banking. Just a different set of ledger-holders. Miners, instead of institutions. Just because it's a different set of folks controlling the ledger doesn't mean this can't happen with a blockchain. Maybe I missed something and the tech prevents this somehow? But not that I've been able to figure out.

Re: Moving money internationally

#106

Post by pavlov » Thu, Mar 03, 2022, 4:59 AM UTC

mmastrac wrote: post #102

pavlov wrote: post #101

Earlier quoted context omitted.

But the catch-22 is that, if it actually becomes popular for fixing the problem of currency controls and sanction lists, governments have the ability to impose a lot more control on crypto exchanges to prevent this kind of use. Maybe at that point there would be two worlds of crypto: you can trade it on the above-the-board exchanges, but can’t move those coins out onto the blockchain in any meaningful amounts. Or you…

Isn't that equivalent to dirty/clean USD? Except that laundering becomes pretty much impossible due to the blockchain.

Yes, if crypto actually became popular for international money transfers, it seems almost inevitable that it would acquire the same kind of regulatory regime that already exists for Western currencies. The exchanges can be compelled either directly or by choking their banking relationships.

Re: Moving money internationally

#107

Post by anovikov » Thu, Mar 03, 2022, 5:02 AM UTC

virgilp wrote: post #104

glerk wrote: post #77

For those saying that crypto is useless, here is a great use case. Authoritarian governments are currently preventing individuals from moving their property across borders. Crypto fixes that.

But it does not - or, to the extent that it does, it only does as a yet-unclosed loophole. If crypto is not currency, it needs to be converted to currency before use and as such can trivially be blocked with KYC rules at conversion. If crypto desires to be a serious currency, it needs to greatly improve efficiency and stop being deflationary. (Funnily enough, Tesla accepts dogecoin but not USDT, so maybe I am wrong w…

Thing is, there are, and will probably always be, enough purely criminal uses for money, where KYC is not a thing, that use of crypto for non-criminal purposes will be able to work too: criminals will function as "entry and exit nodes" between cash and fiat, and between them, legit users will just operate with crypto.

Fiat is based on people's trust with governments. Crypto is based on people's distrust with governments...

Re: Moving money internationally

#108

Post by CyanBird » Thu, Mar 03, 2022, 5:07 AM UTC

virgilp wrote: post #104

glerk wrote: post #77

For those saying that crypto is useless, here is a great use case. Authoritarian governments are currently preventing individuals from moving their property across borders. Crypto fixes that.

But it does not - or, to the extent that it does, it only does as a yet-unclosed loophole. If crypto is not currency, it needs to be converted to currency before use and as such can trivially be blocked with KYC rules at conversion. If crypto desires to be a serious currency, it needs to greatly improve efficiency and stop being deflationary. (Funnily enough, Tesla accepts dogecoin but not USDT, so maybe I am wrong w…

Crypto is infinitely divisible, and because of lack of physicality it does not really suffer from lack of liquidity on the same sense that you can't cut a 20usd bill in half to pay a 10usd item, you just swipe with your phone or wherever e-wallet you use

The deflationary bit, is sort of a problem on the centralization of wealth yeah, but that's a macro problem, not a barrier of entry to individuals

I think that your comment tries to take digs at Crypto in an overly contrarian way, Crypto is digital gold which can be easily hidden, I guess that you could buy a bunch of paper Swiss bonds hide them on a bag or whatever and take a flight with these, but that already has a higher barrier of entry than buying wherever amount you want on ether and put it on a thumb drive, I guess both methods could work, certainly both are easier and sneakier than carrying a brick of gold around on your flight luggage

Re: Moving money internationally

#109

Post by sgustard » Thu, Mar 03, 2022, 5:07 AM UTC

tomhallett wrote: post #79

glerk wrote: post #77

For those saying that crypto is useless, here is a great use case. Authoritarian governments are currently preventing individuals from moving their property across borders. Crypto fixes that.

When most people say "crypto is useless", that is rarely about BTC being used as a currency, and is more about everything else in crypto (NFTs, web3, smart contracts, decentralized apps, ICOs, etc). The idea of a currency which has value because people give it value makes sense, regardless of how speculative it is.

It's not the feature set people react to, it's the speculative bubble and the hordes of grifters.

Re: Moving money internationally

#110

Post by sumanthvepa » Thu, Mar 03, 2022, 5:09 AM UTC

asmithmd1 wrote: post #81

JumpCrisscross wrote: post #25

Earlier quoted context omitted.

> can easily bypass SWIFT restrictions and transact with the affected Russian banks directly “Easily” is the squishy bit here. If they’re settling in dollars, probably not, unless someone’s carting around paper dollars. (This has been done.) If they’re settling in rubles or yuan, for most definitions of “easily,” yes.

Why does settling in dollars make any difference? Like he said, if the SWIFT secure messaging service goes down, someone at a bank in Japan has the phone number of someone at a bank in New York and can "wire" money with a phone call instead of sending a SWIFT message. Wires will be orders of magnitude slower, but money is not frozen. And the real effect is that someone in Mumbai receiving a phone call from a Russian…

Because every single transaction in USD must result in a credit and debit to an account at the US Federal Reserve (except for transactions entirely in paper money -- this is the reason drug dealers like paper money.) For a transaction denominated Yuan(Renminbi) that transaction must eventually result in a debit and credit entry at the People's Bank of China (the central bank of China). In the latter case no US entity need be involved. The problem with the second transaction is that fewer people are willing transact in Yuan than are willing transact in USD. That is changing though, and quite rapidly. Many countries have switched to trading with Russia in other currencies. For example the Indian government purchases military equipment from Russia using the INR currency and therefore, its payment for such equipment does not flow through any US-connected financial system. The US can still stop such transactions though, through other forms of economic pressure: CAATSA regulation for example. Which is why India is particularly concerned about the Russia/Ukraine conflict. IF the US sanctions India through CAATSA to block it from purchasing Russian military equipment, India will be severely hurt and unable to defend itself against China (one of its two primary security concerns.) So bottom line, one can transact outside of the US financial system, but that is significantly less useful, and also does not mean that the US cannot stop such transactions. In the end the thing that enables the US to affect what other countries do, is the absolutely massive size of its economy relative to others and the absolute dominance of its military relative to that of others. As long as it maintains those two advantages, it will be able cripple any other country -- either through war or economic sanctions.