U.S. Banks Curtail International Money Transfers
dealbook.nytimes.com
dealbook.nytimes.com
- Some banks charge more than $60 USD for an international wire which is beyond reasonable. Plus you have to go into the bank fill out a form. Why can't I do this online?
- The US does not use IBAN instead it uses a system which is setup for middle banks to take a stake out of transfers.
- Core of US banking is done with paper checks like in the middle ages. Sending money to someone in many cases actually gets a check printed (the check printer is another 3rd party taking their stake out of the system).
- Bank employees are underpaid and under-skilled workers who don't give a damn (why would they?). Don't expect good service unless you are at a expensive private bank.
- You constantly have to check your accounts to make sure there isn't all of a sudden a large amount missing because a check was cleared wrong or some new fee has been added.
Now you can make transfers on a bank holiday and they reach the other account in seconds. For free!
I don't know why it took so long for us to get the Faster Payment Service.
(not joking)
Also a lot of "mainframes" are actually virtual machines running on modern physical hardware. I've also seen companies who have the console output sent to a webapp and commands returned the same way, thus making these 1980s relics seem almost "modern" (as, for example, you can utilise them from an iPad/Smartphone without an app).
I remember being very surprised when I discovered that mainframe capacity is sold in units of MIPS (millions of instructions per second). Like, you literally buy capacity off IBM by the megahertz. They don't really get faster because there are so few suppliers of this kind of exotic hardware nowadays, and it's hard for the banks to port it all to more modern platforms because the original code is often so obscure and only understood by people who are retired/laid off.
And that's the best case. I've heard of at least one bank that has a job running on their mainframe where nobody can find the source and nobody knows what it does, but they're too afraid to shut it down in case it breaks something.
and recently they had to pay a billion because they facilitated drug money laundry, even city bank being mentioned in the same report facilitating larger amounts and getting no penalty for whatever reason. im almost sure the system is corrupt to the core.
anyway, back on topic, this move is to remove power form migrants because now that the US is past its little depression, we don't want them sticking around. and if you don't understand this, I'm happy for you. keep the good live going in affluent san francisco. only neighborhood problems are buses driving property prices down or some other shenanigan.
Only if you have one of their "rich people" accounts. You have to have something like $100k in your current account or a half million dollar mortgage. Something like that.
Needless to say, agricultural day laborers sending remittances don't qualify. They have to pay up.
I wouldn't mind betting that's the main reason "many big banks are abandoning the business of transferring money from the United States to other countries"
I mean if you were running a low cost service would you want to risk that?
Here it is reformatted:
- Some banks charge more than $60 USD for an international wire which is beyond reasonable. Plus you have to go into the bank fill out a form. Why can't I do this online?
- The US does not use IBAN instead it uses a system which is setup for middle banks to take a stake out of transfers.
- Core of US banking is done with paper checks like in the middle ages. Sending money to someone in many cases actually gets a check printed (the check printer is another 3rd party taking their stake out of the system).
- Bank employees are underpaid and under-skilled workers who don't give a damn (why would they?). Don't expect good service unless you are at a expensive private bank.
- You constantly have to check your accounts to make sure there isn't all of a sudden a large amount missing because a check was cleared wrong or some new fee has been added.
Because then it'd be super easy for thieves to empty out your account into some bank in Eastern Europe.
Do people go to banks in USA regularly? I have been to my bank 3 times in the last 3 years, and two of those were because I was getting a mortgage. A physical visit is expensive both to you and the bank, so everyone has a motivation to reduce them to absolute minimum - everything can be done online, except for verifying identity at account opening or large amount/notarized realestate transactions.
Many recent immigrants want to send money home - this is non-negotiable, because it's one of the main reasons that they emigrated. So they will find ways to send money.
thats even more fragile than bitcoin
Honor can function both in a group of honest citizens and in a group of obdurate criminals. It's a game-theoretic trick raised to the level of virtue and it's independent of group morality.
Hawala is originally from middle-east and has distinct Islamic flavor to it. So I can understand why someone can find my comment offensive.
Hawala has a history of being used in nefarious activities in India so I know better. Black-marketing gold, traceless transfer of money for terrorist activities etc. Gangs have spawned over it and gangs have survived over it. Since it is also used for sending remittance from Saudi to South-Asia by labor/slaves who have their password taken away from them, it is still tolerated socially though not legally.
[1] http://www.johnfwilson.net/resources/Hawala+Occasional+Paper...
http://en.wikipedia.org/wiki/Financial_history_of_the_Dutch_...
The other day I stepped out of a foreign exchange and was approached by an individual asking me if I wanted to buy some forex. This was the first time in over six years I had been approached and I think it is because many immigrants do not have all the official documents to to meet the requirements to get forex.
IMHO some regulation is good but over regulation is an enabler for black markets.
Willing drugs in or our of existence cannot be similarly done.
Attempting to control the flow of "value store" might be unwinnable - but if you look you'll see gold is actually very tightly controlled, so maybe it is winnable. Just try to get a gold bar delivered - you're in for a big surprise about how free the market is (or isn't)
That means less transparency, less control, less tax revenue, reduced government influence.
Seems counterproductive.
That doesn't sound good to you??
But then I grew up, got some life experience, and learned that there are even worse things than taxes and regulation.
I'm pretty sure I don't want my community ruled by a local chieftain with rampant gang and tribal warfare, organized crime syndicates, protection rackets and an official religion.
You can see it happening right now when a state loses its monopoly on violence.
Not to mention 15th C Spain.
ISIS was a non-state actor that had the goal of creating a new state on the territory administered by some existing states, and has to some extent managed to do so as those existing states failed. The failure of a state in maintaining its "monopoly on violence" is almost inevitably followed by another state-like actor displacing it in that role -- there is no shortage of actors wishing to impose their will and no shortage of actors willing to use violence to do so in the absence of an actor with the resources and will to prevent them from doing so.
This move will directly benefit businesses such as Western Union, criticized by consumer protection groups for preying upon immigrants and other disempowered groups. (Western Union has an extremely long history of abusing and maintaining monopoly... see http://arstechnica.com/tech-policy/2011/05/how-the-robber-ba... )
For an impressively useful World Bank resource on typical remittance prices, see http://remittanceprices.worldbank.org/en
I left the industry shortly after we sold our company to Banorte in 2007. I left the industry for the same reason that we sold the company: a nearly intollerable level of regulatory risk. It got to the point in 2006 where a number of our profitable and otherwise-healthy competitors went out of business just because they couldn't keep their bank accounts open. Their bank would get a visit from an OCC examiner, or would ask the FDIC to approve a merger, and instructions would be issued to close all of the money transmitter accounts.
In other words, much of what this article talks about is not new. Here's a very similar article from nearly a decade ago (some of the same people being quoted):
http://www.nytimes.com/2005/03/16/nyregion/16remittance.html
What is new here--what's interesting--is the fact that the banks themselves seem to be shutting down their own remittance services. I had always attributed previous "crackdowns" to regulatory capture: certain banks saw a wealthy, highly-fractured niche, and used their connections in DC to turn up the heat on the non-bank players in order to weaken them and take market share. One of the most infuriating things about what we saw happening in 2005-2007 was that while banks were closing the accounts of non-bank service providers, the banks themselves began offering the same services to their own customers, often through the same networks that the non-bank financial institutions were using. Bank of America was the most prominent actor in this regard; but now, even they have stopped offering money transfer service. Go figure.
It's really unfortunate that such a cool area of tech (international remittances) draws such negative attention from regulators. If it weren't for that regulatory risk--existential in nature, really--I would still be working in the space. Ironically, this is also why I don't think that Bitcoin is a solution for international remittances.
See, the problem here is cash. No one is complaining about the lack of availability of SWIFT-based wire transfers between bank accounts. The transactions being discussed here transit through a secondary banking network that sits atop SWIFT; it is faster (seconds vs. hours), cheaper ($5-$10 per wire vs. $30-$50) and more available (24x7 vs bank hours) than SWIFT, but most significantly, because most of its payouts are made using cash, its participants don't need bank accounts.
Cash payouts are made out of necessity. The majority of international remittance recipiants don't have bank accounts, and the cash they receive from their emmigrant relatives goes to immediate consumtion needs (as mentioned in the article). Unless those recipients, many of whom live in rual areas, were able to cash out their bitcoins on the spot, a bitcoin transfer would be worthless to them. And the bitcoin ecosystem faces the same challenges with regards to bank access as the remittance industry does.
If you want an explanation as to what is driving this "crackdown", I would attribute it to some desire to significantly curtail the use of cash in these kinds of transactions. The low-income people who depend on remittances are collateral damage in service of that objective.
Ignoring fees for a moment, if there are Bitcoin ATMs on both ends of the remittance transaction, it's pretty easy for the participants. Probably even competitive.
Why wouldn't international BTC transfers be regulated the same as international currency transfers?
A ban of the technology would pretty bad and unprecedented, but if push came to shove, Bitcoin traffic could be disguised as other traffic.
Point being that the government can't and doesn't ban everything that can be used for evil, be it from incompetence or rationality. Bitcoin will probably be heavily monitored though, as it is very suitable for that purpose.
http://en.wikipedia.org/wiki/Export_of_cryptography_in_the_U...
HTTPS was crippled, since Netscape shipped only 40-bit RC4 internationally.[1]
PGP's source code was printed so it would fall under First Amendment protections, since binaries weren't legal for export.[2] (See also DJB's Bernstein v. United States)[3]
OpenBSD/OpenSSH is still based in Canada to avoid being subject to the laws.
--------------
1 http://en.wikipedia.org/wiki/Export_of_cryptography_in_the_U...
2 http://en.wikipedia.org/wiki/Pretty_Good_Privacy#Criminal_in... and http://www.pgpi.org/pgpi/project/scanning/
Isn't it conceivable that the government would implement a similarly short-sighted (and ineffectual) policy if Bitcoins were seriously used to harm the US? :-P
It would not.
Who else will run the BTC ATM on each end of the transaction?
A Bitcoin ATM network that operates at a scale large enough to displace or even compete with the remittance networks in Mexico (and other beneficiary countries) would by necessity draw on the banking system to supply it with cash. This is because all of the cash being withdrawn would have as its ultimate (albeit intermediated) source Bitcoin purchases in the US (or other sending countries).
Think of it like this: the Bitcoins being sold in Mexico in exchange for pesos at these ATMs are being purchased by the ATM owner, who will then need to sell them in order to resupply the ATMs with pesos. Who does she sell them to? Without a massive (i.e. hundreds of millions of pesos per day) local demand for Bitcoins in Mexico, her buyers are going to have to be foreign--most likely the the immigrants in the US who are sending money home.
So, she sells those Bitcoins to Mexican immigrants in the US, for dollars. And now she needs to buy pesos, in the form of bills/notes, in exchange for dollars--at which point she is in the exact same situation as any standard remittance provider today!
Everywhere in the world, one of the primary roles of banks is to manage cash logistics, and to act as the retail face of the central bank, which acts as the ultimate sink for excess cash, and as the ultimate source of cash in the event of a shortage. As a result, the banks, and then ultimately the central banks, regulators, and governments generally, act as gatekeepers for any large-scale financial enterprise requiring the disposal and generation of physical cash.
What's more, when you are talking about billions of dollars exiting the US in favor of Mexico, there is only one way that money can move, which is through the central bank, via the banking system.
The only way that Bitcoin can displace the current remittance providers is if a large local demand for Bitcoins already exists in beneficiary countries, such that the inflow of Bitcoin could be absorbed locally, or used by recipients without being cashed in. Either that, or central banks and regulators will have to embrace it--or at minimum tolerate it.
That's not to say it can't happen. It just can't happen without official sanction first, before a local bitcoin market has established itself.
Edit: please leave a comment when downvoting
Bank accounts also are generally free or near-free worldwide, it makes sense for every minimum wage earners to have a bank account, around here they do unless they're working illegally. If they're unaffordable in some places, then maybe that's the thing to solve - it doesn't actually cost much money to keep a "account" & some digital records; and the clerk-face-time of making such a record is comparable to the clerk-face-time of current money remittance services.
If the cost of the transfer actually was determined in a competitive environment I'm sure it would be considerably lower. Unfortunately on such fees it's not in the banking industries interest to act competitively with one another.
I didn't say that. Intelligent actors tend to avoid any real competition. The price is what enough clients are willing to pay to make the whole scheme profitable. There doesn't need to be any fairness for this to happen.
This is monopolistic, anti-competitive and wrong, and the less wealthy sections of the population suffer the most (as per usual).
In fact thinking about it on a typical $50,000 transfer I imagine a $30 fee would actually be a loss leader if you imagine how much you'd have to pay for a compliance officer to read the laundering regs and file paperwork illustrating the transfer is kosher. Against this they typically try to overcharge you on FX (.5% is possible) and also give you 0 interest on your money when they are getting say 5%pa on it so they may make typically 2%*50k on that = $1000 which would cover costs but I'm not sure $30 would.
Sending a standard international bank wire will cost $30-$50 typically, not $5-$10. I don't really know how that price is "justified" as such, except to say that any bank account that is sending international wires increases the AML compliance cost of that account for a bank, and because surprising aspects of the bank wire transfer system are manual, a human being will frequently need to get involved. I would imagine that the incremental cost of sending a bank wire is frequently tiny compared to the cost, but it probably varies significantly from bank to bank (for some, it might even be a loss-leader).
The fees associated with sending a wire via the more ad hoc family remittance network are determined by a competitive marketplace, and are typically $5-$10. Providers are not all banks (although banks do get involved in a large percentage of transactions) and include non-bank companies like Western Union, MoneyGram and Xoom, and smaller players like ViaAmericas (mentioned in the article). People who send money will shop around for the best deal (often, different services are offered within the same retail agent location), and senders will from one month to the next switch providers if the FX rate is better, or if the fees are lower. The bank oligopoly holds no sway here, and if prices could be lower, they would be lower.
Your reaction is a typical one, and one that I remember encountering repeatedly: "why do these transactions cost anything at all?" The truth is, there are significant costs that underlie a family remittance transaction. At least half of transaction fees, and often 80%, are claimed by the retail agents that capture or pay out the remittance. There, you have all of the costs associated with retail, combined with the costs of handling large amounts of cash. On the capture side, many banks will charge retail locations a percentage fee for processing the cash they deposit, and if armored car services are used, they will also change fees for handling. On the payment side, logistical challenges may be even greater, given local conditions.
The amount of money that remains goes to pay for secure and highly-available computer systems, AML compliance processes (which require a significant amount of human involvement), other regulatory compliance costs (security, bonding, record-keeping, reporting, examination fees and assessments), fraud coverage, customer service costs (a call center must be maintained), marketing, and general corporate overhead. Really, what you would imagine it would take to run a remittance network if you thought about it.
If you compare remittance fees as a percentage of a typical US-Mexico transaction ($5 to send $350), they are comparable to other retail payment transactions that involve similar levels of risk and require similar infrastructure. However, volumes are much, much lower than ATM or credit card transactions, so economies of scale yield a much lower benefit, which also adds to the cost.
Are (US) dollar bills a workable substitute for pesos at the receiving end? I mean, can a rural Mexican without a bank account buy what he or she needs with dollars? Or does her or she need pesos?
(Not rhetorical: I really don't know.)
In other words, sure, I understand that BTC are not useful in rural Mexico because many have not heard of them, and most who have heard of them do not trust them, but surely everyone in Mexico knows that US dollar bills retain their value.
Obviously, avoiding regulatory bullying would be paramount and that might be possible by using bitcoin. Just off the top of my head, I can picture a PayPal-ish website that money changers could use. (Money changers are everywhere!) They could open an account on the website to monitor, track, and verify transfers and payout cash to the receiver. And just like PayPal, if there were issues like fraud or laundering, the money changer would be accountable.
This idea is so obvious, I wonder if it's already being done.
Huh, no. HSBC has paid a $1.9B fine not because of a single mistake, but because it knowingly let drug lords launder money through its counters.
The committee is concerned that HSBC cleared large amounts of travellers'
checks over a number of years, without proper anti-money laundering
controls, despite evidence of suspicious activity.
Between 2005 and 2008, HBUS cleared $290m worth of US dollar travellers'
cheques which were being presented at a Japanese bank.
The daily transactions were worth up to half a million dollars, with large
blocks of sequentially numbered cheques being handed over.
After prompting from US regulators, HBUS found out that the travellers'
cheques were being bought in Russia - a country at high-risk of money
laundering.
We're not talking about a fine for executives laundering money, we're talking about fines about 'a lack of proper anti-money laundering controls, despite evidence of suspicious activity'. This is weasel-speak for 'we found something suspicious but can't prove anyone important was involved.'
The decision-makers who would have seen this 'evidence' would probably be layers removed from HSBC top management. That executives are being blamed for this in the court of public opinion is part of the reason why companies are turning to massive Orwellian computer systems to monitor all financial activity.
[+] There exists a tax on automobiles which increases with age and which, fairly quickly, causes the tax to cost more than the residual value of the automobile. It is justified as a public safety measure, since you get an inspection when paying the tax, but is actually a straight-out subsidy to domestic car manufacturers, since it essentially mandates "Despite the fact that your products work for decades, customers are required to buy a new model every 6 years."
[Edit: I should add that while Hokuriku doesn't give one the impression of being impressively well-organized from the notes in the Senate investigation that my tiny bank in central Japan believes in KYC so much that their manager-at-the-time both successfully intuited "Patrick is seeing someone." and "Patrick has broken up with his girlfriend." from changes in my cash withdraw patterns and wrote these observations down in their log just in case the next manager needed them. I have many fun anecdotes from working with them, like the time my gym botched a withdraw request and received a blisteringly polite note in Japanese saying that no one with the specified name had an account at the bank and if, hypothetically speaking, the gym had business with one of the bank's customers then it should, hypothetically speaking, extend him the common courtesy of spelling his name right.]
Seems like they got fined for being super shady.
Actually, I'll save you the effort that you didn't bother to spend yourself, and tell you what it means, to the best of my understanding.
HSBC affiliates (not HSBC itself) in some countries were processing certain transactions that were exempt from a certain regulatory requirement concerning transferring money to people designated to be terroists. HSBC built a computer system to enforce this regulatory requirement. The affiliates omitted information in internal reports to avoid triggering the computer filter for these transactions, and HSBC was like "can you include this information?" and the affiliates were like "no, these transactions are exempt". This is what the quote refers to.
So this quote is blaming HSBC for not demanding other banks file transactions internally in a way they weren't required to so as to not automatically trigger a computer system they weren't required to automatically trigger. It is this practice that Congress is calling 'deceptive'. The committee doesn't identify to what extent this is a crime, probably because none of the transactions were identified by the committee as violating the regulation that nobody--not HSBC, not Congress--was requiring them to follow.
Years later this practice would be described as "money laundering" and "sanctions evasion". However it was in reality just a reasonable way to tackle an unreasonable problem.
[1] http://www.bloomberg.com/news/2012-12-12/hsbc-mexican-branch...
Yes.
I'm not sure this bodes well for the American banking system in the long term; today's migrant workers are the parents of tomorrow's entrepreneurial children.
Here in Hong Kong where around 1 in 20 people is foreign domestic helper, there are are an enormous number of services competing for the remittance business [1].
Linking national security to this role and levying completely disproportionate fines as in the BNP case is clearly an abuse of the special powers the U.S has.
And the BNP fine is kinda light for funding genocide, if you ask me.
Not to mention that the government handing out these fines is responsible for far more devastation than any bank.
And about genocide: I think we both know that the set of countries against which the U.S has imposed sanctions is not equivalent to the set of countries that have committed genocide. It's a list of political enemies of the U.S.
Not all countries on the list have comitted genocide and there are quite a few U.S allies and trading partners that have committed genocide or other brutal human rights violations. They are not on the list because it's politically convenient or very lucrative.
I can do money transfers but they're very expensive using the regular banks. Currencyfair.com, which is innovative (and cheap!), is also prohibited in Singapore for outbound transactions, but it's available in the US.
That way even with a light touch regulation they'll just shut off portions of it and tell us to get off their roads until we've learned not to inconvenience them with laws.
Look for additional players to enter. We're soon launching WireCash, essentially "Expedia for Money Transfer". We've partnered with many of the existing players to offer their services online in one central location for consumers. Want to empower consumers with choice, freedom, and options, as well as great/competitive service.
Paypal is not immune from the same problems the other banks are having.
> I opened a bank account easily with Banco Azteca and they gave a me a debit card. It has been impossible to verify. Paypal says I need the bank to authorize international transactions. Yesterday another bank clerk told me that Mexican cards cannot be used as debit and credit cards, that I´m going to have the same issue with any bank.
There are actually smaller banks that cater to latino immigrants but apparently the fees are higher and it is very tough to get started. I believe they had to deposit a big chunk of money to get started.
1) & 2) are hitting peoples ability (largely immigrants sending money home) to send money to many countries cheaply and getting occasional blockages.
IMO seems like a short term issue. Larger players are stepping back as the profits are not worth the risk/effort, so smaller players have the opportunity to step in. I recently put a small amount into the fund raising of a company doing just this as I see it as a great area for disruption. I don't want to be seen as commenting for a plug so won't mention the name.
Anyway they will have to pay something for the transfer.
I personally see it as a positive thing because it opens market for new solutions.
What is the motive for keeping the money in the country? I'm not disagreeing I'm just unsure why that is a stipulation.
Adding further difficulties to international transfers may encourage expats to recalculate their positions. Then there will be further network damages. I would rank the average US Diaspora as less positive about getting involved with a US based business partner than the average European due to familiarity with the US' regulatory style and its chaotic results.
We're basically in a state of surveillance of nearly all financial transactions.
This is, of course, always a state security goal. Computers make it a lot more scary to me though. Monitoring can be a lot more personal. More individuals can be watched than ever before, with records kept accessible for longer than ever, with better software for reporting than ever before. And it's never been easier to lose control of large quantities of information now that gigabytes can be copied in seconds.
I am absolutely convinced this is the reason. I'm reading a lot of theories that racist or anti-immigrant motivations lie behind this, but I think it simply is that the priority has shifted between the conflicting motivations of the government to spy on everything and away from facilitating illegal labor for the benefit of large businesses. I have wondered for a while now when this was going to happen because it seemed unreasonable for a surveillance state to leave such a gaping hole in its vision.
No it's not. You have it completely backwards!
Failing nations are delighted for the local currency to leave.
Failing countries won't let foreign currency in.
America's ability to pump its own oil is far more important than its ability to print currency. You can't print oil, and having to import it in large quantities would make the economy unviable.
However, all countries in the world without oil have to buy their oil in USD ... so they first convert their local-currency to USD, and then purchase oil, driving USD currency demand.
It's also something that nations who are planning war do.
Where remittance ends, forex begins.
Extreme volatility is also irrelevant if the alternative is for your money-less family in some other country to receive no money, or once the hoops you have to jump through to do it legally with USD gets too difficult.
I don't know what that price is, but if it's higher than what banks and money transfer companies are charging, Bitcoin is the more expensive alternative.
Actually, to price it, you need to find out how much you would need to pay someone to take on that risk (i.e. the cost of hedging the risk). If people's willingness to pay to avoid the risk is higher than the cost of hedging it, then you have a profit opportunity.
This isn't Bitcoin specific but getting both in two adjacent sentences was a good opportunity to comment on it.
Exchanging between bitcoin and local currency is somewhat difficult and incurs fees. In fact, in the US one of the key reasons it is difficult is that government is naturally trying to close off this potential loophole, because that's what organizations of this nature do -- really this brings us back to the issues of control that are raised by the original link.
It would be interesting if this kind of increasing pressure on financial gateways led immigrants to start demanding payment in bitcoin, but there's no sign of that happening yet. They need to be familiar with it first.
Immigrants have an extremely limited selection of places to spend bitcoin in their home countries. Though if the demand existed, then the market would grow. Ironically, the most developed bitcoin economies are the US and Europe. In the US, there is a pretty wide selection of goods available, thanks to big retailers like Overstock and Newegg, but even there, one is still limited to a small subset of stores.
* edit: I should add that, with the current state of the software, it's not the safest way for an average person to handle large amounts of money. Obviously, there's lots of potential for improvement there.
It's not going to happen overnight, but if USD transfers gets too expensive and difficult, it's a natural outlet. And I'm sure illegal money transfer services will spring up to (have a pile of drug money in Mexico and want to move it into the US without the complexity of moving the cash? Sell money transfer from the US to Mexico)
This year, I've been shopping for phones again in Mexico. Every network and every shop is full of nothing but smartphones. Almost all monthly plans come with data. Accessory shops with cases and covers and headphones and stuff exist in every town.
Mexico's bitcoin infrastructure is ready to take over the money transfer business if the government and the banks make it hard or expensive to go through official channels. All it will take is enough expense to make it worth learning to use bitcoin. The network of small entrepreneurs that would do the actual cash exchange already exists: Mexico is a land of small shops and informal businesses.
Erecting arbitrary barriers is more likely than ever to create a black market.
Sell and redeem your asset for local peso deposits in Mexico. The vast diaspora will use their accounts at home to buy the asset then sell them p2p in the US to their community network. Traders all over Mexico can change the asset to cash p2p using your business as guarantee the assets are worth something. No correspondent banks to worry about. Now somebody in the US can load up your version of counterwallet.co, click on p2p trade and buy your asset from somebody local either for cash or bitcoins to send to their family back home or directly to a cash out service in Mexico that just delivers money.
And it's all very well to move to a cashless society, but even so, much of the bureaucratic overhead, premine (ie instamine), trusted systems and centralization would still remain, right?
I think the centralization of fiat is the real problem when you have the dregs of society attracted to it in order to manage or control it. Furthermore, government in general affords power that could not otherwise be obtained so easily by such dregs, thus leading to siphoning and general corruption, eventually causing blowback into society.
One solution is making up for rising transaction costs with lending. Someone reliably transferring money can just as reliably service a loan.
Suppose an American is sending $100 three times a week to Mexico. You lend the American $1 200 at the beginning of the month. This is sent to a Mexican bank with instructions to disburse, in $100 installments three times a week, to a beneficiary. The American, instead of sending money to Mexico, services the domestic loan. You retain a lien on the funds deposited in the Mexican bank, which would revert to you in the event the American defaults on their loan. Similar cash flows, one international wire.