We exchange crypto por Pesos in "black markets" and use the pesos to buy the everyday stuff. Larger transactions are almost always in USD (a car, a property), but it's harder to justify the funds. Most people getting paid in crypto aren't declaring any taxes. Even if you do, the limit for the most common method is 1k USD/month

Exactly how it works in these countries. More and more of the economy is flowing through Black Market crypto dealers located in neighborhoods. The government takes a 50% tax on foreign cash coming in to convert to local currency, and once you do it you have to deal with 50% inflation. As a result there are black market crypto Banks. Someone will convert crypto for pesos to buy groceries at the crypto bank. The grocery store takes the peso they get and puts it back in the crypto Bank. Nobody wants hold the pesos any real time because it is a losing proposition.

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