A pleasant Pandemic Surprise. Global Remittances surge in 2021 to almost $600 Billion a year.


(Photo: Curt Carnemark/World Bank)

Remittance Flows Beat the Odds to Grow Despite Pandemic – At the onset of the COVID-19 pandemic, the conventional wisdom was that international remittances would slow to a trickle. Migrants and diaspora members who had lost jobs due to the global economic downturn, the thinking went, would be unable to send money back to their countries of origin or ancestry, imperiling families and communities depending on those transfers.

But as in so many other areas, the pandemic created surprises. After a modest drop in 2020, remittances remained surprisingly strong in 2021, increasing by 7 percent to a total projected $589 billion sent to low- and middle-income countries. Money transfers were projected to have increased to every region of the world except East Asia and the Pacific and grew the most (by 22 percent) to Latin America and the Caribbean.

Why were predictions so wrong? In part, the strong remittances were in line with longer running findings that money transfers increase during times of crisis. While this logic tended to assume that the crisis was on just one end of the remittance system, affecting either the senders or receivers, the pandemic suggested that a similar phenomenon occurs when both sides are impacted. The swift economic recovery and government-led stimulus programs in the United States and Europe were other likely factors. So too was the increase in oil prices, which most affected senders in Russia and countries in the Middle East.

Another reason was that the costs of sending money dropped slightly as many services moved from cash- to digital-based systems. The significantly fewer travelers during the pandemic meant that fewer individuals hand-carried cash and goods; instead, more people sent money via digital platforms such as mobile money and online wallets. El Salvador embraced the notion wholeheartedly in September when it adopted the cryptocurrency bitcoin as legal tender, in part to reduce remittance costs (remittances account for around one-quarter of El Salvador’s gross domestic product, more than all but a handful of other countries). Still, mobile services represent a small share of the ways that people sent money, in part because they require a bank account. The costs of sending remittances averaged 6.3 percent through the first six months of the year, more than double the 3 percent target set by the United Nations.

For countries and communities that received large amounts of remittances, the money was often a lifeline that served to meet subsistence needs and immediate expenses such as to buy food, pay for health care, and cover utilities.



Financial Inclusion

PayPal one of the largest payment networks in the world with more than 25 million merchants and more than 300 million accounts has announced a partnership with New York located and financially regulated PAXOS https://www.paxos.com/ to allow all PayPal account holders to trade cyrptos and to accept or make crypto payments. PAXOS own website advertises “hold US dollars without opening a US dollar Bank account”


You may find it surprising that Ayodo Foundation, would be supportive of PayPal’s initiative, but we are supportive of any blockchain initiative which will enable cost efficient movement of funds between and among our registered Merchants.

Consider the diagram below and imagine all registered Merchants being fully vetted and strictly regulated (KYM) and further assume a Stellar, or in this case a PayPal account, being required of each registered merchant. Everyone below the red-dotted line in the diagram, the end users or customers, many who may be Digitally and Financially excluded, would transact in fiat cash, transformed of course into “cloud money”. The required Merchant Settlement would be performed using the merchants’ own crypto accounts. Ayodo plans to perform this settlement function using the Stellar.org block chain project Centarus, but deploying with PayPal could accelerate our product development cycle and be just as mutually beneficial. The whole point being for everyone to benefit from the efficiencies of moving funds on a blockchain, wherein the actual transfers are between and among the registered merchants (KYM) while still allowing the massive population of customers to transact in their preferred fiat currency.

Ayodo was not supportive of Facebook’s earlier attempt to launch the Libra cryptocurrency, due to Facebook’s proven inability to protect user’s personal data. It is difficult to monetize on personal data when individuals remain anonymous. Ayodo Foundation, on the other hand, subscribes to Self Sovereign Identity (SSI) principles and is creating universal QR Digital Identities (MQR) for any end user be they wealthy, poor, old age or a child all the while protecting their privacy and providing bank-like payment and money transfer services on a not-for-profit basis. You may also remember PayPal was initially a major supporter of Libra prior to backing out after several regulatory bodies voiced their concern. The difference here is PayPal has payments ( think bank-security) in its DNA, and both PayPal and PAXOS are well established regulated financial entities. Additionally Paxos offers a white labelled Stable Coin (USD backed) so when it comes to using the virtual coins, our registered merchant settlement process would effectively still be a cash based transaction. ” PayPal will convert the cryptocurrency into the relevant national currency, so the company being paid will never receive the virtual coins – just the correct amount of pounds or dollars”. Effectively combining the efficiencies of the blockchain, the stability of fiat-backed cryptos plus instant automated Cash-In Cash-Out to the merchants, which has often been a major hindrance to greater Financial Inclusion based on Merchant centric models.

This development could represent a positive outcome for Financial Inclusion, especially when applied to a Merchant Centric model such as Ayodo Foundation is creating. PayPal’s (and Visa’s) intentions are naturally to roll out a fee based crypto payment service to all their customers and thus profit from the reduced costs of delivering the service, whereas Ayodo , with a mandate for financial inclusion, believes it would be better for any of the “crypto schemes” to launch with registered merchant account holders only. A global service permitting registered merchants to settle ( hold & trade) relatively small settlement funds using a distributed ledger would be more accommodating of regulator angst. The greatest majority of customers, especially those living on modest incomes in developing economies, are not interested in holding, trading or paying with crypto currencies of any variety. Similarly the small merchants they patronize, would likely still prefer to accept cash. The nearly 2 billion unbanked adults would not use a PayPal account for the same primary reason Findex has consistently found – they do not have a bank account being for lack of financial resources. This fact would not change simply by offering PayPal in a Crypto version. Worldwide small Merchants, busy running their businesses, are themselves often not financially sophisticated, nor prepared to suffer a potential loss due to the high volatility of crypto values. They may, however, be quite accepting of the use of a stable coin and prepared to entrust PayPal to settle, or pay them in local fiat currencies, when it would help build their customer base and introduce business and cost efficiencies to their payments practices by accepting not-for-profit payments schemes such as Ayodo’s mobile YodoPay or even payments using Ayodo’s universal QR Digital Identities (MQR) which can be issued and interrogated in printed or digital format at any participating merchant. (See: http://www.moja.uno)

For those unaware, Ayodo Foundation is a Canadian registered not-for-profit and Fintrac is the Canadian regulator similar to FINCEN in the USA. Very interesting therefore, to see recent changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act) , effective June 1, 2020, include entities trading in virtual currencies under FINTRAC’S purview to align with FATF Regulation 16 . https://www.sygna.io/blog/fintrac-canada-virtual-currency-crypto-regulations-2020-2021/ Wisely the guidelines only apply on Crypto transactions exceeding $1,000 which is similar to the “carve out” to the rules for pre-paid products, the exemption which has allowed YodoPay to remain an anonymous mobile payments product since inception. Assuming merchant settlements are timed to automate at values below this $1,000 threshold, a Stellar settlement service would represents the ideal process for Ayodo’s own Merchant-Settlement process. Highly dependent upon PayPal’s fee for service, their new system could be a preferred option with a stable coin feature and the likelihood that the merchants would also accept PayPal consumer payments.

Especially in the developing world, small merchants are most often long term, well known licensed members of their communities. Merchants are of fixed physical location and more likely than their customers to be themselves banked. Perfecting a cash based Merchant centric paradigm would allow the bar to be raised on monetary transactions, preserving necessary KYM requirements on the merchants. All significant movement of funds would occur at the top of the pyramid on fully regulated channels and even here could be limited to amounts less than one thousand dollars in each instance. Know-Your-Merchant (KYM) requirements, with balance and velocity constrains, on both merchant and individual accounts, would ease the regulatory compliance costs while allowing individuals to transact digitally. Merchant settlement effectively aggregates the flow of cash through the regulated channels (PayPal or Centarus) which would result in cost efficiencies. Replace difficult to implement and enforce KYC with easier to implement and enforce KYM. By regulating and monitoring Merchants themselves, while allowing individuals to transact digitally on essentially fiat cash yet in a fully digital form, would make an excellent starting point and will create a more inclusive financial system.

The problem with Digital. Another Major Data Breach.

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Are you a T-Mobile customer? You and another 100 million customers have just had your personal data; your social security number, your name, your physical address, your phone number, your IMEI number and your driver license information , all compromised. In an age of relentless Identity Theft, why do we continue to surrender so much personal information and more importantly why do large corporations such as T-Mobile fail to provide adequate protection ? This is more than a question of a loss of personal privacy. In this age of digital banking services and e-commerce payments your privacy has been compromised but potentially also your life’s savings or financial asset. Who is protecting your money ? Simple SIM Swap fraud has caused an estimated $100 million in fraud loss since the Covid Pandemic began. Whether the scammed person is a Nurse loosing $10K or a Crypto trader loosing a million these losses hurt and reduce all of our confidence in digital financial services. Thanks T-Mobile for not subscribing to Self Sovereign Identity practices (SSI). You could have and you should have done better.


Equifax data breach postmortem.

So what if you and up to 150 million other people lost their identity, including credit card numbers, to identity theft.


equifax breach

It’s been more than 3 years since Equifax belatedly reported their totally irresponsible, almost incomprehensible, data breach. You would think that when 148 million people had their sensitive personal data, including their names, driver licenses, date of birth, phone numbers, email addresses and social security numbers stolen,  good people everywhere would begin to demand changes in our Credit Rating Agencies’ practices AND question the value of Know-Your-Customer or KYC. This is not the first time I have posted on the diminishing value of,  or the dangers of KYC,  yet so very little has changed  Equifax postmortem  . The whole credit industry,  which relies upon knowing explicitly and well the person to whom credit is being extended needs to be revamped and our legislatures need to force changes in the law which will prevent these types of data breaches. There are technologies available now,  such as Self Sovereign Identity (SSI) Sovrin.org which could easily prevent such major breaches provided institutions do not subvert the intended practice by storing the ID credentials to enhance marketing practices.  Physical credentials, such as a Drivers License for example, could be presented and verified by a Bank employee who will issue a digital credential while NOT storing a plain text record of the actual credential.  When will legislators wake up to the problems inherent in KYC and amend our laws to better protect citizens from identity theft ? In case you believe it is only private companies who exhibit such poor custody of your personal identity;  Governments, the very people making the laws and failing to protect our privacy by forcing KYC upon us, are every bit as guilty of exposing your identity to nefarious criminals.  Government data breaches .

Speaking of Government they are not only failing to properly protect your data, they are often the perpetuators of the breach.  Equifax data was in fact,  breeched by the Chinese government, as an act of espionage!  That is to say not by criminal “black hats” intent upon financially benefiting from the personal data and Credit card numbers stolen. Chinese Government Hack


Many of us will be surprised to learn who facilitates the most money laundering and terrorist financing. It appears of course, to be some of the world’s largest banks such as HSBC, Deutsche and JPMorgan Banks. These Banks have facilitated more than $2 Trillion in illicit fund transfers on behalf of Drug Cartels, Organized Crime, Ponzi schemes and Terrorist Financiers over the past decade despite repeated warnings and fines which have failed to limit these illicit money flows.



It makes an absolute mockery of multinational banks, efforts to limit the spread of “Open Banking” initiative based on grave warnings that opening Bank APIs to Fintech startups would endanger society and impair the use of legal channels for the transfer of money. https://www.openbanking.org.uk/customers/what-is-open-banking/

The truth is many Fintechs, such as Ayodo Foundation a registered not-for-profit with a mandate to alleviate poverty by enhancing financial inclusion, provide services to essentially marginalized individuals, who’s net worth is so abysmally low, that the money transfer services Ayodo does provides are typically in sums less than USD 500, which is less than half the proscribed limits under the regulatory guidelines developed for prepaid products, an exemption Ayodo relies upon to not be deemed a Money Service Business (MSB) and to therefore avoid costly KYC, which is both difficult and unnecessary for our client base, many who remain unbanked, transact mostly in fiat cash and do not have proper government issued id anyway.


The Canadian Border Services Agency (CBSA) has started down a slippery slope by introducing Facial Recognition for Nexus users.

Surveillance cameras in Tiananmen Square, Beijing.

China deploys hundreds of millions of cameras to watch over every aspect of their citizens lives.

Tell our Privacy Commissioner we do not want such a massive invasion of our privacy in this country.


There is a much safer way to use biometrics for verification to protect our border entry points. Europe, where the protection of personal privacy is taken more seriously than in China and apparently now more seriously than in Canada, Self Sovereign Identity (SSI) is used to allow authorities and individuals to better protect their personal identities while permitting individuals to verify their identity to authorities as required. https://sovrin.org/

Canadian Border Service Agency (CBSA) wants to use facial recognition templates and potentially breach our privacy while risking the exposure of Canadian’s Biometric identities. Write you MP or the Canadian Privacy Commissioner to ask that the Privacy Office stand up to the CBSA and insist that they abide by Self Sovereign Identity (SSI) principles. Below is the concern I have submitted to the Office of the Privacy Commissioner https://www.priv.gc.ca/en

“I was informed by NEXUS this morning that they would be introducing FACIAL RECOGNITION for screening Nexus clients at Canadian Airports. NEXUS assured us that they will be protecting the privacy of individual travellers by not storing personal information on the local Kiosk and rather would be storing personal information on secure cloud servers operated by CBSA. I don’t believe for a moment said servers will be truly secure and neither should you or CBSA. I object to the Canadian Border Service Agency unnecessarily infringing on my rights to privacy and exposing my biometric identifier. As a minimum CBSA should be setting an example by enforcing Self Sovereign Identity (SSI) which is being promoted and gaining acceptance in Europe, where the protection of privacy is more enlightened than here in Canada. https://sovrin.org/

The slow process of restoring privacy and ensuring cash acceptance.

This past month has seen several unexpected events; Mark Zuckerberg advising more Government regulations on technology companies to protect privacy, Singapore enacting legislation to restrict fake news and the city of Philadelphia becoming the first major American city to make it illegal for any retailer not to accept cash. One of the nicest attributes of cash is that it is anonymous. Let’s not get crazy and start assuming that anonymity is somehow a criminal trait. Anonymity strongly correlates to individual privacy and freedom.

Even Sweeden until now considered one of the Nordic leaders in the movement towards a Cashless society is having second thoughts. Governments are realizing that markets with pure digital transactions (networks) lack inclusiveness and can be easily disrupted by natural disaster or state sponsored cyber warfare, which could leave hungry citizens with no means to purchase groceries. Seventy percent of Swedes want the surety of always have an option for cash payments. Sweeden

Wonderful to see MasterCard, therefore, at least recognizing privacy has become a major societal issue. MasterCard People do not want explicit details of every single transaction they make being recorded only to see this consumer data monetized by sharing with advertisers, where, when, who, what and how much was purchased and just as likely be part of yet another major data breach endangering their privacy and facilitating ID theft. I believe MasterCard is taking their que from Apple who have quickly learned from Facebooks’ own troubles surrounding breaches of privacy.

I’d say eliminate KYC and legislate privacy with Self Soverign Identity (SSI) or we should all move back to using cash which by the way can now be digitized or converted into digital form as YodoPay does so elequently.

Crypto Scams continue unabated

It is truly shameful that thieves and scammers have ruined the prospects of blockchain creating a fundamental sustainable shift towards democratic money. Having a decentalized trust method to exchange digital assets does nothing to prevent criminals from operating illicitly on the edge.

The problem being that in order to potentially benefit from the blockchain, at some point real people with real money (fiat currency) must buy Crypto assets . This “edge” is the chasm between historic or what we might refer to as normal monetary systems and the new age crypto systems. Having a decentralized, anonymous, low friction and fast means to move digital money fails us miserably because once in digtal form digital money has no reliable auditable method to track and recover stolen weath. It can simply disappear into thin air as just happend to my Ethereum holdings.

While comtemplating how to use the blockchain for Ayodo Foundation’s altruistic intentions of providing non-profit payment and money transfer processes and thus enhancing financial inclusion (Remittance Services) to help alleviate poverty, I needed to learn about blockchain through perosnal experience. I therefore was caught up in Quadrigacx “flame out” having lost my entire Ethereum holdings on this Vancouver exchange. Fortunately for me, unlike this poor victim who lost more than $500K QUADRIGACX my entire holdings represented about $10 worth of crypto.

If you read my earlier posting below on what a terrible year 2018 has been for most holders of Crypto currencies, I failed to mention the ModernTech fradulent ICO which neted the backers more than USD 600 million, which was stolen as the organizers disappeared with the funds. That scams of this magnitude can be perpetuated from jurisdictions, or regions (Singapore & Dubai) who are encouraging the Fintech industry and are adopting more “Open Banking” due to human greed is truly discouraging. These bad actors, through their criminal actions and their human greed, are preventing the evolution of digital money which could serve humanity well. Note these dangers occur at the “edge” – either on an Exchange where cryptos are traded with either a data breach by unknowns or when the backers themselves disaapear with the money or via an ICO . If regulators really wanted to protect society then they would accept the blockchain for what it real is and focus on passing new legislation to control the Exchanges and the ICO and in particular Cash In and Cash Out (CICO) and if you also have read any of my previous posts this shouild not be through stronger or more KYC regulations, as when criminals walk away with $660 millioin dollars from 32K purchasers, the accounts are NOT balance limited. On average each purchaser, or each account represented $20,625.


The importance of CICO

Can’t overstress the importance of the deregulation of Cash In and Cash Out (CICO) for Financial inclusion. Ayodo’s own merchant centric mobile money service YodoPay is reliant upon the CICO services being provided by small merchants worldwide. The Consultative Group to assist the poor (CGAP) fully recognizes the importance of CICO in reaching the poor who are often marginally or totally unbanked. Still 70% of the adult population in emerging SE Asia (excluding China) remain unbanked.

Eight hundred million Indians remain marginally banked transacting primarily in cash or fiat currency ( INR) so why not leverage the 15 million small merchant there with established cash handling practices to allow CICO and penetrate into this market to finally and fully enhance financial inclusion. As much as the Governments of developing countries may like to emulate the developed world, univeral western style banking may not be a preferred model for poor people who are eking out a living on a few dollars a day income. Pragmatically speaking these people have no real need for most banking services and with the unintended costs and problems of Identity theft perhaps the developed world should be reconsidering our over reliance on a credit/debit for payments and search for better solutions founded on blockchain solutions. The real poor require minimal financial services, mostly for money transfers and micro loans, two area banks have proven incapable of providing in a secure affordable fashsion. Poor people and even some weathly people trust and prefer to transact in cash. CGAP has been trying to enhance financial inclusion for more than a decade, and the experience has taught them the necessity of deregulating CICO. Here are a few links to articles and posts by CGAP staff on CICO.

The importance of CICO by CGAP’s financial sector leads.