How to buy and store USD & the pros and cons of each option

A note: Please kindly note that Cenoa does not provide investment, tax, legal or accounting advice; and this material has been prepared for informational purposes only. You should consult your own advisors before engaging in any transaction. You can find detailed disclaimers on Cenoa’s website. 

All over the world, economic instability has led to wild, unchecked inflation and subsequent currency depreciation. As a way to protect their savings and build for the future during such challenging times, many people have started buying USD.

Why do people buy USD from other countries?

Since the U.S. dollar is a strong and relatively stable currency, it’s a sought-out option for holding onto savings when a person’s own currency has tanked in value. In Argentina, Pakistan, Nigeria, Egypt, Ghana, Kenya, Turkey and many other countries, it’s been the best option for everyday people looking to stay afloat.

How to buy USD

There are a few ways to buy dollars in your home country. The cost to buy U.S. dollars can be high, but for many people in inflationary countries, it’s worth it for the stability. Plus, not all options charge fees or unfavorable exchange rates. Options vary country to country, but there are three major ways to buy dollars that we’ll get into below. 

Buying USD from banks

Pros

Relative safety and familiarity

A bank you use on a daily basis will always feel more secure than other options. Some banks let you order dollars online, which is convenient and easy, though it often requires a waiting period before you can come pick them up. 

Cons

Higher fees determined by local government

In many countries, governments will try to discourage the purchase of USD by setting high fees or unfavorable exchange rates. 

Unstable access to money

Even with banks, there’s no guarantee you’ll be able to reliably access USD. In cases of extreme inflation, even banks (and entire governments) can run out of USD to sell. 

Buying USD from currency exchange offices 

These private businesses buy and sell foreign currency. They often cater to tourists, but locals can also take advantage of their services.  

Pros

Accessibility and ease

Often found in city centers and tourist areas, foreign currency kiosks are usually easily accessible and straightforward to use. However, most of these don’t operate online, so you must show up in person to do your transaction.

Cons

High fees 

Foreign currency sellers can sometimes come with additional fees on top of the less preferential exchange rate.

Poor exchange rates

Since they’re private businesses, foreign currency sellers can set whatever exchange rate they like — they keep the difference between the internationally agreed-upon exchange rate and the higher one they charge, which is how they make money.  

Less cash availability

Depending on how much USD you want to buy, foreign exchange sellers may not always have large amounts on hand. 

Buying Digital Dollars on Cenoa

Pros

No fees

Cenoa doesn’t charge any kind of fees, so you can access digital dollars for exactly their value — no surprise additions.

Better rates

You can buy dollars directly in the Cenoa app with real exchange rates.

High yield

By keeping your funds in the Cenoa app, you can watch your digital dollars grow with 5%+ yield. 

Withdraw any time

There’s no lockup in Cenoa, so you can withdraw your funds at any time, whenever you need them.

Send funds to your friends

With just a phone number, you can send digital dollars to a friend anywhere in the world.

Digital dollars vs. dollars in your bank

Cenoa uses only one type of digital dollar: USDC issued by Circle. USDC is known as a fully-reserved stablecoin, where every USDC is 100% backed by cash and U.S. Treasuries. Cash is held at leading U.S. financial institutions like The Bank of New York Mellon, which has $46.6T in assets under custody and administration. U.S. Treasuries are held at The Bank of New York Mellon and are managed by leading U.S. asset manager BlackRock, which has $10T in assets under management. As a result, USDC digital dollars are always redeemable 1:1 for U.S. dollars. 

Additionally, USDC issuer Circle is a fintech that is regulated as a licensed money transmitter under U.S. state law just like PayPal, Stripe, and Apple Pay. Circle’s financial statements are audited annually and subject to review by the SEC (Securities and Exchange Commission) in the U.S. Circle holds more than $43B in reserves and enables $9T in transaction volume.

Digital dollars you buy on Cenoa are stored at the biggest U.S. banks and financial institutions and are likely much safer than dollars held in a local bank.

Cons

Withdrawing cash (paper) USD

Some local banks allow you to withdraw paper cash in USD from their branches and sometimes from ATMs. Cenoa does not have any physical branches or ATMs right now. So, if you need cash USD, you need to transfer dollars from Cenoa to your bank account first.

How to store USD

Once you’ve purchased your dollars, it’s important to have a plan for how to store them. You have a couple of options:

Keep dollars in your bank account

Keeping the USD you’ve purchased in a bank account is convenient, as you’ll be able to convert them to your local currency as needed (though usually for a fee). 

However, you’ll likely pay fees to store your funds at your bank, and pay high fees when you want to send it out to family or friends. Plus, withdrawing your funds often requires advance notice of a few days. 

Storing your dollars in a bank account also typically means you’ll get zero yield, and worse, the bank or government could freeze assets or stop withdrawals altogether in moments of crisis.

Keep your dollars at home 

Keeping dollars at home can be risky. You could lose your dollars in the case of fire, flood, earthquakes, or robbery. And because it’s not your local currency, you can’t easily spend it. 

You must also carry it with you physically if you want to take it to be converted to your local currency in order to spend it — plus, you can’t send it to loved ones without being face to face. 

Keep your dollars in a digital app

Storing your funds in Cenoa comes with none of the risks of holding your funds at home or in a local bank in a country with an unstable economy. Just add your funds to your Cenoa Super Wallet, watch your digital dollars grow, and withdraw at any time — with no fees, ever. 

One of the biggest benefits of DeFi super wallets is that the blockchain cuts out rent-seeking intermediaries (like banks). Users never give up full control when using the Cenoa Super Wallet, because it’s a non-custodial wallet — it doesn’t actually hold anything, it just documents transactions and monetary value. Even if Cenoa as a company went bankrupt in the worst case scenario, customers could still easily access and withdraw their digital dollars — simply by using another wallet. 

Get to know Cenoa and buy — and store! — your digital dollars 

Buy digital dollars with the Cenoa app and enjoy the peace of mind that comes with knowing your funds are stored as stablecoins — always on par with USD, and safe from the devaluation of your home currency.