Thread by @amenka

#Putin suggested establishing new intnl settlement system based on ancient Hawala. The urge for Hawala 2.0 shows how desperately 🇷🇺 needs a systemic solution to the issue of intnl payments.Attempts to switch to rub/yuan/gold/crypto haven't been successful

frankrg.com/102702

Hawala (originated in 8th century in South Asia) is an informal funds transfer system that allows for the transfer of funds from one person to another without the actual movement of money. Nowadays it is also called underground banking and is widely used, for instance, in Iran

This is how it works: Vladimir needs to send $1000 to his partner Ali, who lives in another country. So he approaches a hawaladar Deniz and gives him the amount of money for Ali. Deniz contacts the hawaladar in Ali's country and asks him to give money to Ali.

In September I argued (thanks @CEIP_Politika) that it would be hard for #Russia to convince the rest of the world that its attempts to reinvent the global monetary system are an improvement on the tried and tested convenience of reserve currencies.

carnegieendowment.org/politika/87814

SWIFT ban & restrictions on $ and € force #Russian businesses to look alternatives in yuan, ruble, lira, crypto and take additional costly risks with that.For instance,to avoid correspondent banking, Russia has allowed cash settlements for import/exports
kommersant.ru/doc/5680931

The share of yuan in the structure of FX earnings sales by exporters exceeds 40% in Oct. It will inevitably increase, but we cannot speak of an established system comfortable for Russian businesses and foreign partners. Otherwise, Putin would not have had to offer Hawala 2.0.

This actually brings us to a conclusion: challenging the established world system of settlements and payments, man needs something more attractive than curses to dollar domination, weird geopolitical chimeras, and a nuclear button

Or look for brokers to set up international transactions in #Darknet. If before there were isolated offers, now there are dozens, writes @kommersant By the description it is a digital Hawala with the use of crypto, but it also can be fiat currency

kommersant.ru/doc/5682314

Essential to keep in mind that in some countries, Hawala is illegal (for instance, India) due to its informal nature and absence of regulation or oversight. It's widely used for money laundering

Russian firms look for brokers to set up intnl transactions in #Darknet. If before there were isolated offers, now there are dozens, writes @kommersant By the description it is a digital Hawala with the use of crypto, but it also can be fiat currency

kommersant.ru/doc/5682314