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The Mechanics of Hawala Banking System with Hawaladars 2. Benefits of a Hawala System or Hawala Network 3. Criticism of Hawala Banking System and Hawala Transactions 4.
The Icelanders decided a few years ago that their economic future lay in banking. They privatised and deregulated their banking system, and with strong government support, the banks grew to 10 times the size of the economy.
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A particularly prevalent example of fraud is found in fractional reserve banking; 2 the fractional reserve bank keeps only some fraction of the money deposited and loans out the rest. Consider a full reserve bank; various people come and deposit 100 ounces of gold, and the bank therefore gives these depositors in total certificates for 100 ounces of gold.
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Another reason could be the potential for Bitcoin to cause major disruption of the current banking and monetary systems. If Bitcoin were to gain mass adoption, the system could surpass nations' sovereign fiat currencies. This threat to existing currency could motivate governments to want to take legal action against Bitcoin's creator.
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