There are many alleged claims about Bitcoin that I discount, mostly concerning anonymity and privacy, when Bitcoin is used regularly. However, I have often considered a one time use of Bitcoin an interesting possibility for crossing a border with wealth. I generally considered it in line with hawala.
But it seems market participants prefer to use hawala, at least as far as the recent migration into Europe.
WSJ explains (pay attention to the numbers, we are talking serious money here.):
ISTANBUL—Behind the reinforced door of an unmarked office in this teeming immigrant neighborhood, a man who goes by the name of Hawez Zaman moves money the same way his predecessors in the Middle Ages did, in an off-the-books transfer system critical to today’s spiraling migrant crisis in Europe.
The centuries-old system known as hawala enables users to transfer money from one point to another entirely on the basis of trust—largely without a paper trail and often outside the law.
It is the dominant way migrants flooding into Europe pay for their journeys, used for 90% of the transactions in a people-smuggling trade valued at around $2.5 billion a year in Europe, according to European security officials and researchers. It is used for a further $390 billion a year migrants send back home as part of an informal but widely accepted financial system used across the developing world….
In Istanbul each day, Mr. Zaman, a stocky 32-year-old Iraqi Kurd, said he receives up to 200 cash payments of €1,500, or about $1,600, on behalf of migrants from Syria, Iraq and Afghanistan who are paying smugglers for the first leg of the journey from Turkey to Greece on the way into the European Union.
He also moves money every day unrelated to migrant smuggling in amounts from a few hundred dollars to the thousands….
When migrants reach their destination in Greece, Germany or beyond, Mr. Zaman said he makes a virtual transfer to an associate hawala dealer, or hawaladar, who releases the money at the other end to the smugglers.
For each payment, Mr. Zaman said he charges roughly 5%—or a bit more than half the percentage typically demanded by established money-transfer agents. He saves money by not having to pay compliance, infrastructure and other costs that licensed agents have.
Note well, I have always suspected that the high transfer fees at licensed money-transfer agents has a lot to do with government fees and regulations. The cheaper hawala transaction fee seems to support this view.
Hawala is also often quicker—a transfer can be almost instantaneous—and can easily reach people in remote areas. Customers include those with low levels of literacy, no bank accounts or credit cards and sometimes no identification documents.
Bitcoin supporters often promote Bitcoin on the basis that it is an instant transfer amd suggest that this is the only way t amke an instant transfer. I have always held there is no…