5 ms·

This attempt to control the flow of money seems like another unwinnable war, like the war on drugs. The money will find other paths, which may well include info

This attempt to control the flow of money seems like another unwinnable war, like the war on drugs. The money will find other paths, which may well include informal or underground banking services, which are even further away from government oversight. Many recent immigrants want to send money home - this is non-negotiable, because it's one of the main reasons that they emigrated. So they will find ways to send money.

mmsimanga 12y ago
I agree, I am an immigrant in South Africa and over the last few years I have noticed increased regulatory requirements to send money through official channels. The other day I stepped out of a foreign exchange and was approached by an individual asking me if I wanted to buy some forex. This was the first time in over six years I had been approached and I think it is because many immigrants do not have all the official documents to to meet the requirements to get forex. IMHO some regulation is good but over regulation is an enabler for black markets.
noinsight 12y ago
All you need is the Hawala network: http://en.wikipedia.org/wiki/Hawala http://en.wikipedia.org/wiki/Hawala
- gcb0 12y ago
  money transfer based on honor? thats even more fragile than bitcoin
  - cubancigar11 12y ago
    Honor is what honorable people call it. Others call it gang.
    - TeMPOraL 12y ago
      I don't think it deserves downvotes, OP is right. Honor can function both in a group of honest citizens and in a group of obdurate criminals. It's a game-theoretic trick raised to the level of virtue and it's independent of group morality.
      - cubancigar11 12y ago
        Thanks for saying that. I guess I should have explained further. Hawala is originally from middle-east and has distinct Islamic flavor to it. So I can understand why someone can find my comment offensive. Hawala has a history of being used in nefarious activities in India so I know better. Black-marketing gold, traceless transfer of money for terrorist activities etc. Gangs have spawned over it and gangs have survived over it. Since it is also used for sending remittance from Saudi to South-Asia by labor/slaves who have their password taken away from them, it is still tolerated socially though not legally.
        cubancigar11 12y ago
        *passport not password!
  - jeangenie 12y ago
    Actually it's used quite successfully in many parts of the world [1]. [1] http://www.johnfwilson.net/resources/Hawala+Occasional+Paper+_3.24.03_.pdf http://www.johnfwilson.net/resources/Hawala+Occasional+Paper...
  - kordless 12y ago
    Actually, Ripple sorta works this way.
  - chiph 12y ago
    It's how it worked in the 16th century when the Italian merchants began issuing Bills of Exchange which meant you no longer had to transport large chests of coins across dangerous territory. The Dutch later picked up on the idea and ran with it. http://en.wikipedia.org/wiki/Financial_history_of_the_Dutch_Republic#The_Wisselbanken http://en.wikipedia.org/wiki/Financial_history_of_the_Dutch_...
- anu_gupta 12y ago
  Transferwise (http://transferwise.com http://transferwise.com) is sort of based on this - it matches up parties to massively reduce the cost of transferring money. I've used it a couple of times, and it worked very well, and saved me a significant amount of money.
beagle3 12y ago
There's a huge difference, which makes flow of money controllable: The US Government (with the fed) can change the value and availability of money, and they do it constantly. The US can decide, tomorrow, to inflate or deflate the USD, and by fiat, it will happen. Willing drugs in or our of existence cannot be similarly done. Attempting to control the flow of "value store" might be unwinnable - but if you look you'll see gold is actually very tightly controlled, so maybe it is winnable. Just try to get a gold bar delivered - you're in for a big surprise about how free the market is (or isn't)
TeMPOraL 12y ago
Exactly. I expect a Hawala network to pop up / vastly expand there, with potential side effect of getting more people closer to the world of crime (I'd expect at least some of the Hawala network nodes to be criminals with money).
- mike_hearn 12y ago
  The USA has been cracking down on Hawaladars for a long time now. Unlicensed money transmitters, you know. It can cost vast sums to become a licensed MT in America, varying by state.

mmsimanga 12y ago

I agree, I am an immigrant in South Africa and over the last few years I have noticed increased regulatory requirements to send money through official channels. The other day I stepped out of a foreign exchange and was approached by an individual asking me if I wanted to buy some forex. This was the first time in over six years I had been approached and I think it is because many immigrants do not have all the official documents to to meet the requirements to get forex. IMHO some regulation is good but over regulation is an enabler for black markets.

noinsight 12y ago

All you need is the Hawala network: http://en.wikipedia.org/wiki/Hawala http://en.wikipedia.org/wiki/Hawala

gcb0 12y ago
money transfer based on honor? thats even more fragile than bitcoin
- cubancigar11 12y ago
  Honor is what honorable people call it. Others call it gang.
  - TeMPOraL 12y ago
    I don't think it deserves downvotes, OP is right. Honor can function both in a group of honest citizens and in a group of obdurate criminals. It's a game-theoretic trick raised to the level of virtue and it's independent of group morality.
    - cubancigar11 12y ago
      Thanks for saying that. I guess I should have explained further. Hawala is originally from middle-east and has distinct Islamic flavor to it. So I can understand why someone can find my comment offensive. Hawala has a history of being used in nefarious activities in India so I know better. Black-marketing gold, traceless transfer of money for terrorist activities etc. Gangs have spawned over it and gangs have survived over it. Since it is also used for sending remittance from Saudi to South-Asia by labor/slaves who have their password taken away from them, it is still tolerated socially though not legally.
      - cubancigar11 12y ago
        *passport not password!
- jeangenie 12y ago
  Actually it's used quite successfully in many parts of the world [1]. [1] http://www.johnfwilson.net/resources/Hawala+Occasional+Paper+_3.24.03_.pdf http://www.johnfwilson.net/resources/Hawala+Occasional+Paper...
- kordless 12y ago
  Actually, Ripple sorta works this way.
- chiph 12y ago
  It's how it worked in the 16th century when the Italian merchants began issuing Bills of Exchange which meant you no longer had to transport large chests of coins across dangerous territory. The Dutch later picked up on the idea and ran with it. http://en.wikipedia.org/wiki/Financial_history_of_the_Dutch_Republic#The_Wisselbanken http://en.wikipedia.org/wiki/Financial_history_of_the_Dutch_...
anu_gupta 12y ago
Transferwise (http://transferwise.com http://transferwise.com) is sort of based on this - it matches up parties to massively reduce the cost of transferring money. I've used it a couple of times, and it worked very well, and saved me a significant amount of money.

beagle3 12y ago

There's a huge difference, which makes flow of money controllable: The US Government (with the fed) can change the value and availability of money, and they do it constantly. The US can decide, tomorrow, to inflate or deflate the USD, and by fiat, it will happen. Willing drugs in or our of existence cannot be similarly done. Attempting to control the flow of "value store" might be unwinnable - but if you look you'll see gold is actually very tightly controlled, so maybe it is winnable. Just try to get a gold bar delivered - you're in for a big surprise about how free the market is (or isn't)

TeMPOraL 12y ago

Exactly. I expect a Hawala network to pop up / vastly expand there, with potential side effect of getting more people closer to the world of crime (I'd expect at least some of the Hawala network nodes to be criminals with money).

mike_hearn 12y ago
The USA has been cracking down on Hawaladars for a long time now. Unlicensed money transmitters, you know. It can cost vast sums to become a licensed MT in America, varying by state.