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Comment by pratik661 | Hacker News Reader

The Islamic world in the Middle Ages had a system of decentralized money transfer (hawala) where capital could be moved virtually across any region that had a trusted hawala intermediary. European aristocrats in the 1700s (and probably before) from different countries were also able to open lines of credit in other countries. It’s actually referenced in Count of Monte Cristo.

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I always wondered how the count could so easily transfer money around like that. I thought it was a fictional mechanism to make it easy for him, but I guess I was wrong! Reading more about it, and it is a very interesting system.

Isn't Hawala networks still in use today albeit illegally?

Yeah, they are. Came up in my yearly compliance training for the bank i work for. It was the first i’ve heard of them.

But information traveled as slowly as people then, unless we're talking about short distances that pigeons could cover (or I guess something equivalent to the pony express, but that seems unlikely). They still had to send a courier to actually deliver the message to exchange the money, and there may very well have been a requirement of receiving this message (otherwise how would you know that the money hadn't already been moved since there can be a weeks to months long delay between messages)?

I think one of the major benefits of it is that you can send one courier with information about the passwords and money amounts, without having to send a wagon or boat load of specie. That one person can travel much faster than a caravan and there is no risk of theft. A caravan takes large amounts of preparation and is a target for robbers.

Human travelers need rest. Horses get tired, etc. A message can be transferred to a fresh courier. In fact the ancient Persian empire had a system where horses were stationed at regular intervals so that a message could travel across the empire without halting.

Telegraphy was invented in the late 18th century and electric telegraphy in the 19th.

This is not the point, even though there was banking, the actual settlements and information flow, flowed slower (gold and gold notes.)

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