Countries want US dollars. They want dollars to use to buy goods, which are usually priced in USD, and for debt interest payments.
Countries sell services (tourism) and goods (products and commodities) to earn dollars. However another major source is by creating their own local currency (i.e. Brazilian Reals), inflating it (5 to 10% common in Brazil), and banning citizens from holding foreign currency (i.e. citizens cannot hold USD). So if you want to pay someone in Brazil from the US, you send them USD, which is then stolen by the government and converted into shittier local currency (Reals).
A better option, as employees I have in Brazil will attest, is you pay them in stablecoins (i.e. USDT or USDC) which they then convert at their own leisure to Reals when they need to pay bills. This allows them to earn interest on the stablecoins and protects them from the shitty local fiat currency.
This theft of wealth from citizens via the local shitty fiat currency is a global phenomena. See Argentina, Lebanon, Venezuela, Turkey, and on and on. This is a major driver of global stablecoin demand, because everyone wants USD, especially retail, but until crypto the ability to receive and store USD was very limited by governments.
Could employers just pay USD to foreign workers who have something like a Wise account (i.e. to keep it in USD and convert it to their local currency at will)?
The US is blessed with stable laws, individualism as an ethos, and a culture that asks for forgiveness over asking for permission. Corruption is less overt here.
In less developed countries, it's the opposite. Wise and other centralized money transmission platforms are ripe targets to apply government pressure, with capital limits, currency conversion games, freezing accounts, and so on.
Cryptocurrency inverts the whole process. Having a crypto wallet is like having an offshore bank account, or perhaps a vault in your house. You can also send money peer-to-peer over the internet very quickly. It's just like cash, except you can make purchases (even huge purchases) without needing the danger of physically holding a lot of money.
Of course there are many downsides. You can be hacked, you can forget your password / seed phrase, you can send money to the wrong place, the whole thing is cumbersome. These downsides are being worked on in various ways, but there are some permanent downsides to holding bearer instruments that fiat accounts held by regulated financial institutions don't have.
The downsides of countries like Venezuela, Lebanon, and Argentina for trying to build businesses and accumulate savings are larger than the downsides of cryptocurrency. Entrepreneurs and normal, everyday citizens are embracing crypto from the bottom-up because governments obviously hate the freedom crypto provides their citizens. It makes collecting taxes and doing the fiat-inflation theft game harder. It requires citizens to self-report rather than automatic-deduction, which reduces government revenue.
Argentina is a de facto USD-based economy. All property purchases are conducted with United States $100 bills, with entire companies whose job is to safely transport a life savings' worth of cash to the real estate closing, where the cash is then scrupulously assessed for counterfeiting. In an economy like this, you can imagine how stablecoins can be useful, despite the cumbersome and risky nature. It's still 10 to 100x safer and better than suitcases of cash.
> In Argentina, most transactions are conducted using cash, primarily in the form of $100 US bills. This may seem somewhat traditional, but it's the prevailing practice in this country.
> Particularly when purchasing property, you typically need to make your payment in US dollars because property prices are consistently quoted in this currency.
> You can opt to bring cash or utilize a financial service to obtain the required US dollars in cash, although this may involve a fee.
> So, if you're planning a purchase, be prepared to carry a substantial amount of US dollar bills into the country, possibly up to $500,000. However, keep in mind that this process isn't straightforward, and you will likely incur a commission fee.
> Having a crypto wallet is like having an offshore bank account
> It makes collecting taxes ... harder.
How does that mesh with "If some company systematically went country by country, learned the local HR laws, ... and then handled all accounting and taxes"?
So it' snow been over 24 hours, and we still haven't seen the answer to two questions about this business-plan. But I guess we'll hear about "unwarranted hate on HN" or some such very soon.
> the point of my business idea above was to solve a pain point around paying a global work force considering the costs of global wire transfers
How much do you think it will cost to "systematically go country by country, learned the local HR laws, partner with the most trusted exchange, and then handle all accounting and taxes"?
> Having a crypto wallet is like having an offshore bank account
> It makes collecting taxes ... harder.
How does that mesh with "If some company systematically went country by country, learned the local HR laws, ... and then handled all accounting and taxes"?
Every human is motivated by the same human desires, from thousands of years ago to now. Race is meaningless, we are all human. So why are some countries decrepit basket cases while others are successful?
The answer is government, laws, and culture. The governments of Argentina (until things got so bad they elected a self-described anarcho capitalist libertarian!), Venezuela, Cuba, Lebanon, etc. have created terrible environments for their citizens. Crypto is allowing their citizens to break laws that are hurting them. I support the citizens fighting against their socialist and communist governments that are robbing them. That's the core function of empowering citizens with decentralized money.
"""
If some company systematically went country by country, learned the local HR laws, partnered with the most trusted exchange, and then handled all accounting and taxes, a truly global HR and payment system could be built to make onboarding and paying everyone 10x simpler.
the point of my business idea above was to solve a pain point around paying a global work force considering the costs of global wire transfers vs. instant USDC settlement.
"""
So. Given all this, here are the questions:
1. Given that wire transfers cost money, and you want to make them cheap/free and instant, how much do you think it will cost to "systematically go country by country, learned the local HR laws, partner with the most trusted exchange, and then handle all accounting and taxes"?
2. Given that, by your own words, crypto is like having money in offshore accounts making tax collection more difficult, how does this mesh with your proposal of having a company do accounting and collect taxes?
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Note: I'm not in the least surprised that you can't answer these questions even if the first one of these I asked very early in this discussion: https://news.ycombinator.com/item?id=39372364
That's the reason there's so much "unwarranted hate" on HN: because people are not stupid, and they don't fall for demagoguery and grand proclamations. 99.9999999999% of all crypto proposals fall down immediately under the lightest of scrutinies: they are inevitably self-contradictory, unworkable, costly, don't do the job advertised, better implemented other technologies, or any or even all of the above.
Sorry, I thought the answers to those questions were obvious.
The reason a business will exist and have value is because they did the work of figuring out how to pay workers in each country. My company does this now for Brazil, so it is possible to do legally.
The offshore bank account comment is to envision what it is similar to. For example it’s possible for an Argentinian to fly to the US and open a bank account in Miami, it’s just cumbersome to then get USD out of it and into Argentina. With a crypto wallet it’s similar to this but much more streamlined. The proposed business will figure out the intricacies of each country.
So you want to pay in dollars, but at the same time "figure out local laws and taxes" even though at the same time local laws and taxes don't allow payment in dollars...
Countries sell services (tourism) and goods (products and commodities) to earn dollars. However another major source is by creating their own local currency (i.e. Brazilian Reals), inflating it (5 to 10% common in Brazil), and banning citizens from holding foreign currency (i.e. citizens cannot hold USD). So if you want to pay someone in Brazil from the US, you send them USD, which is then stolen by the government and converted into shittier local currency (Reals).
A better option, as employees I have in Brazil will attest, is you pay them in stablecoins (i.e. USDT or USDC) which they then convert at their own leisure to Reals when they need to pay bills. This allows them to earn interest on the stablecoins and protects them from the shitty local fiat currency.
This theft of wealth from citizens via the local shitty fiat currency is a global phenomena. See Argentina, Lebanon, Venezuela, Turkey, and on and on. This is a major driver of global stablecoin demand, because everyone wants USD, especially retail, but until crypto the ability to receive and store USD was very limited by governments.