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Comment by em_te | Hacker News Reader

>> So does crypto [...]

> I'd wager that this is a lie. Please name one.

Alibaba ran a Foreign Exchange service on top of crypto. I don't know if it is still running or not. It functioned like Western Union. Customers sent local currency to Alibaba, Alibaba bought crypto with that local currency and in another country sold that crypto for foreign currency and then deposited it into the foreign currency account.

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The crypto part adds nothing to this process. There are already very efficient systems for exchanging one fiat currency for another without going through crypto.

The crypto part obviates the need for using international wire transfers and the powerful correspondent banks that make it possible.

Alibaba could already avoid that need for individual transactions by just holding balances in the different currencies, like e.g. Wise and many other retail forex providers do. They only need to deal with correspondent banks for balancing out those accounts in case more money flows in one direction than the other, and those transactions are large so the costs are not as much of a concern.

In any case, your argument presumes some desire to get rid of the correspondent banks. Most people don't have that desire, they just want the money to go from A-B reasonably cheaply, and there are existing great solutions for that except at the fringes — like criminals, avoiding sanctions, avoiding capital controls, etc — which is why crypto stays on those fringes.

>>Most people don't have that desire, they just want the money to go from A-B reasonably cheaply, and there are existing great solutions for that except at the fringes

Yes, it is for the fringes. One day Alibaba could find itself on the fringes, as collateral damage in some geopolitical dispute that locks it out of the centralized global financial system, as a result of which country it is based in.

I have no idea if this concern motivated Alibaba's reliance on crypto though.

Alibaba is under more threat from its own government than any outside force

Could an alternate means of settlement be used? Runescape gold or hawala?

Potentially the involvement of those banks is a feature and provides value?

Things to ponder...

Those alternate means are not very durable.

Gold isn't durable? It will still be valuable long after crypto currencies are a footnote in history.

I didn't realize you suggested gold. I thought you meant "runescape gold". Yes gold is durable.

I suspect cryptocurrency will be a store of value far further into the future than gold. Gold becomes plentiful once extracting resources from asteroids becomes economically viable.

https://www.parity.io/blog/un-world-food-programme-uses-pari...

The UN saved more than 40,000 USD per month in bank transfer costs by using blockchain.

This article is basically an ad for Parity, and doesn't contain any details on how those savings were actually achieved, any way to verify that the number is genuine, or any way to know whether the same savings could have been achieved with improved processes with or without blockchain (which is very likely).

So, they replicated Western Union only less efficiently?

As a consumer, I don't mind if they are less efficient. Just as long as they are the cheapest option.

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