The International Monetary Fund or IMF, Money Transfer Systems and ...

Introduction

Why Hive as a Way to Send Money Matters

Being able to send and receive money easily is super important for people's lives. When people can't move money around, it's often linked to poverty. And it's also why I think Hive could be a big deal for the world.
That's why I wrote this post called: The International Monetary Fund or IMF, Money Transfer Systems and Poverty. I think that in order to understand how important Hive can be to the world as a money transfer system, you need to understand the current non-global, global money transfer system called Swift. And in order to understand why HIve could really help the world you need to understand why not having Swift System Access can keep countries poor or impoverished, as in most of their people live in poverty.

First, what is the IMF?

Okay, imagine a big club with almost every country in the world as a member – that's kind of like the International Monetary Fund (IMF).

What does IMF do?

They help countries work together with money.

They want all the countries to get along when it comes to their money stuff.

They try to keep the world's money system steady.

They don't want big money problems to pop up and cause trouble for everyone.

They make it easier for countries to trade with each other.

They help set things up so countries can buy and sell stuff without too many problems.

They want more jobs and healthy economies everywhere.

They try to help countries grow their economies in a way that lasts and creates jobs.

They want to make poverty less of a problem.

They work to help countries become richer so fewer people are poor.

World's Money Watchers:

They keep an eye on how countries are doing with their money.
If they see a country heading for trouble, they might give them advice on how to fix things.

World's Money Helpers:

If a country has a really bad money problem – like they can't buy important things – the IMF can lend them money to help them get back on track. But usually, the country has to promise to make some changes in how they handle their money.

World's Money Teachers:

They help countries, especially poorer ones, learn how to manage their money better, like how to collect taxes and run their banks.

World's Money Smoothers:

They try to make sure it's not too confusing or shaky when countries exchange money with each other.

Basically, the IMF is like a global team that tries to keep the world's money system working well and helps countries that are having money troubles so that more people can have better lives.
Unfortunately the IMF has a big problem, because a lot of things the IMF would like do to for poor countries doesn't work well because those countries don't have access to SWIFT. So we need to talk about SWIFT.

First, What is Swift??

The SWIFT Money Transfer System (Society for Worldwide Interbank Financial Telecommunication) is essentially a secure and standardized messaging network that banks and other financial institutions around the world use to communicate with each other about financial transactions.

Think of it like this:

It's not actually moving the money itself. SWIFT is more like a highly secure and reliable email system specifically for banks.
It sends payment orders and confirmations. When you want to send money internationally, your bank uses the SWIFT network to send a message to the recipient's bank with all the instructions: who to pay, how much, and where to send it.
It uses unique codes. Each member bank on the SWIFT network has a unique SWIFT code (also called a BIC - Bank Identifier Code) that identifies them.
This ensures the messages go to the right place.
It's a cooperative. SWIFT is owned by its member financial institutions.
It's the backbone of international finance.
Over 11,000 financial institutions in more than 200 countries use SWIFT to facilitate trillions of dollars in transactions every day.
*REmember the swift system is digital, and money is not digital. So the Swift system doesn't send money, it sends promises to pay. Which is what these emails actually are, promises to pay or settle debts.

SWIFT is required to make money transfers safe and efficient.
So although IMF help is important, money transfer infrastructure is equally important and in some economists eyes, more important.

When it comes to poverty, money fixes almost everything: food, shelter, clothing, sanitation; water and sewage, infrastructure like roads, electricuty and communications.

These are the things which lift countries out of poverty, and they take money.

How Sending Money (or Not) Connects to Poverty

The IMF (that's a big group that studies money stuff around the world) has looked at how not being able to use this system called Swift can be connected to poverty.
Even though the IMF doesn't have studies that directly say if you can't use Swift, you'll be poor, their work and other smart people's research show a strong connection in a few ways:

1. How It Messes with Sending Money Home (Remittances):

Why Sending Money Home is a Big Deal:

The IMF and lots of other smart groups say that when people working in one country send money back to their families in another country (that's called remittances), it really helps those families. It helps them buy food, go to the doctor, go to school, and start little businesses.

What Swift Does for Sending Money:

Swift is like a main road for banks all over the world to talk to each other about money transfers, including those remittances.
If a country or its banks can't use Swift, it makes it much harder for that money to flow.

Problems When You Can't Use Swift:

If you can't use Swift, the ways to send and get money become slower, cost more, and might not be as safe. Robbery and Murder occur.
This means less money gets to the families who need it, making it harder for them to get out of poverty.

2. How It Hurts Trading with Other Countries and the Economy:

Swift's Role in World Trade: Swift is like the main way businesses in different countries talk about and pay for things they buy and sell from each other.

What Happens When You Can't Use It:

If a country's banks can't use Swift, it makes it really hard for them to trade with other countries.

This can lead to:

Less Money from Selling Things: Businesses might have trouble getting paid when they sell stuff to other countries.
Things Cost More to Buy: It gets harder and more expensive to pay for important things they need from other countries.
People Don't Want to Invest There: Companies from other countries might not want to put their money in a place that has trouble with international money stuff because they can't get their profits out of the country and so even successful businesses close.
Bad for the Economy = More Poverty: When a country can't trade and doesn't get investment, the economy doesn't grow as much, people lose jobs, and more people end up in poverty. It's not directly about one person using Swift, but it messes up the whole money situation.

3. How It Keeps People Out of the Financial System:

What "Financial Exclusion" Means:

This is when people don't have access to basic money stuff like bank accounts, loans, and ways to pay.

Swift as Part of That System:

Even though regular people don't use Swift directly, it helps banks talk to each other so people can send and receive money internationally through banks. If a country can't use Swift, it's like cutting them off from a big part of the world's money system.

Why the IMF Cares About Including Everyone:

The IMF knows that when more people can use financial services, it helps reduce poverty and makes the economy better for everyone.

Last Words or TLDR:

Even if the IMF doesn't have a study saying "no Swift = you're poor," the fact that Swift helps with sending money home and trading with other countries (both big ways to fight poverty) means that not having access to it can really hurt a country and its people.
It makes it harder for money to flow where it needs to go.
In my next article I explain in detail why Hive can help the world with it's big money problem; lack of access to swift.

Where I Got My Info:

Remittances:

Funds for the Folks Back Home
(www.imf.org)

Understanding Swift:

A Guide to the Swift Network | Thunes (www.thunes.com)

Swift history

(www.swift.com)

The End.

This post was written by @shortsegments

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The International Monetary Fund or IMF, Money Transfer Systems and Poverty.