Context
Recently, a Financial Action Task Force (FATF) report warned that traditional hawala networks are increasingly integrating digital technologies and virtual assets, creating new channels for money laundering and terrorist financing. Nearly 70% of surveyed jurisdictions reported technology integration into such networks.
Explanation
- Hawala is an informal value-transfer system in which money is transferred through a network of intermediaries or hawaladars, often without the physical cross-border movement of cash.
- Digital hawala combines traditional hawala arrangements with technologies used for coordination, execution, settlement or concealment of transactions.
- It may involve encrypted messaging, mobile wallets, fintech platforms, payment-service providers, virtual assets and Virtual Asset Service Providers (VASPs).
- Stablecoins, whose value is generally linked to another asset such as a fiat currency, can facilitate virtual-asset-based settlement.
- Emerging networks may also employ AI-based transaction structuring, multi-account routing and rapid fiat-to-crypto conversion.
- Such anonymity and cross-border operation can facilitate money laundering and terrorist financing (ML/TF).
- FATF is an inter-governmental body established in 1989 that sets global standards against money laundering, terrorist financing and proliferation financing.
La Excellence IAS Academy, the best IAS coaching in Hyderabad, known for delivering quality content and conceptual clarity for UPSC 2026 preparation.
FOLLOW US ON:
◉ YouTube : https://www.youtube.com/@CivilsPrepTeam
◉ Facebook: https://www.facebook.com/LaExcellenceIAS
◉ Instagram: https://www.instagram.com/laexcellenceiasacademy/
GET IN TOUCH:
Contact us at info@laex.in, https://laex.in/contact-us/
or Call us @ +91 9052 29 2929, +91 9052 99 2929, +91 9154 24 2140
OUR BRANCHES:
Head Office: H No: 1-10-225A, Beside AEVA Fertility Center, Ashok Nagar Extension, VV Giri Nagar, Ashok Nagar, Hyderabad, 500020
Madhapur: Flat no: 301, survey no 58-60, Guttala begumpet Madhapur metro pillar: 1524, Rangareddy Hyderabad, Telangana 500081
Bangalore: Plot No: 99, 2nd floor, 80 Feet Road, Beside Poorvika Mobiles, Chandra Layout, Attiguppe, Near Vijaya Nagara, Bengaluru, 560040