Today, tens of billions of dollars are being transferred from immigrants that have immigrated from Western countries to developing countries. The transfer of Hawala money has created embarrassment for western intelligence, taxation, trade and financial systems in the many Western countries.
The Hawala method, which is based on mutual guarantee and a relationship of trust between money changers and traders, creates a financial mechanism embedded within financial systems – exchange rates, trade and more have managed to support and subsidize the economies of developing countries for years.
While Using the “Huwallah” methods – traders report overestimation and underestimation of goods. Exchangers set a price for an exchange rate that is higher or lower than the rate represented in an exceptional case, given the transfer that takes place at “Walla”.
More so, It seems that the entry of the Western world into the blockchain era and the use of cryptonic virtual coins will not change the benefits that money has been assimilated by “Hawalla”.
If the Western world does not study in depth the basic need of immigrant residents for the adoption of the Hawala method and does not translate these insights into a sophisticated or alternative financial mechanism, Hawala funds will continue to be a key channel for money laundering and exploitation of Western economies, including by crime and terrorism.
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By Ilan Lochoff, February 14, 2021
