Moving money internationally • Hacker News Board

Re: Moving money internationally

#191

Post by rswail » Thu, Mar 03, 2022, 1:51 PM UTC

larrysalibra wrote: post #80

> “Sorry, you have citizenship from the High Risk Country list, accordingly I’m not allowed to open this account for you. This is a commercial decision of the bank and will not be reversed.” This sounds like what I heard from a lot of non-US financial companies when I used to be American and then didn't want to open accounts. Frustrating but predictable and probably intended outcome from regulator behavior.

See FACTA. If an overseas bank (say in Australia) open an account for a US citizen, subject to US IRS taxes, then they have US regulations to comply with for not just that account.

FACTA requires an overseas bank to identify US account holders and then report their personal and other details to the IRS, including balances and withdrawals.

So now some bank in a foreign country has to not only do due diligence on you and as soon as you say you are a US taxpayer or there are signs you are, it is required to report your account to the IRS, and if it doesn't it's subject to a 30% withholding tax on transfers to it as an institution from the US.

Of course, under the rules, it's up to the bank to be careful, but the local tax authority doesn't care, so often there's a "Don't Ask, Don't Tell" sort of attitude.

Re: Moving money internationally

#192

Post by rswail » Thu, Mar 03, 2022, 1:56 PM UTC

fmajid wrote: post #168

__d wrote: post #127

Earlier quoted context omitted.

FATCA made life difficult for non-US banks supporting US-citizen customers. Many won't open new accounts, some forcibly closed existing accounts.

You are effectively limited to the few large banks that can handle the red tape. It wasn't designed to make US persons' life abroad miserable, even if it did succeed handily to the point some US citizens are opting to renounce their citizenship rather than keep enduring the pain. The intent was to make the IRS' compliance processes easier. The level of detail in the FinCEN reporting Americans with financial assets ab…

What is interesting is that revoking your US citizenship (or Green Card permanent residency) isn't sufficient to stop you being subject to IRS law.

It actually costs you money, $2,350, to give up your citizenship.

The filings to give up a Green Card is equally byzantine.

Re: Moving money internationally

#193

Post by rswail » Thu, Mar 03, 2022, 2:02 PM UTC

imtringued wrote: post #152

lottin wrote: post #124

Earlier quoted context omitted.

Currency pegs are vulnerable to speculative attacks. https://en.wikipedia.org/wiki/Speculative_attack

Using a negative interest rate to reduce the miney supply is a much better idea than using a peg. To be fair you can do both. A negative interest rate is a speculators nightmare.

I thought that because Singapore is primarily a market/port economy, having its currency pegged against a basket that covers the majority of its trade weightings would help it withstand dramatic movements in individual currency swap rates with the Singapore dollar.

Re: Moving money internationally

#194

Post by fmajid » Thu, Mar 03, 2022, 2:03 PM UTC

rswail wrote: post #192

fmajid wrote: post #168

Earlier quoted context omitted.

You are effectively limited to the few large banks that can handle the red tape. It wasn't designed to make US persons' life abroad miserable, even if it did succeed handily to the point some US citizens are opting to renounce their citizenship rather than keep enduring the pain. The intent was to make the IRS' compliance processes easier. The level of detail in the FinCEN reporting Americans with financial assets ab…

What is interesting is that revoking your US citizenship (or Green Card permanent residency) isn't sufficient to stop you being subject to IRS law. It actually costs you money, $2,350, to give up your citizenship. The filings to give up a Green Card is equally byzantine.

Yes, and a substantial exit tax.

Re: Moving money internationally

#195

Post by rswail » Thu, Mar 03, 2022, 2:05 PM UTC

WoahNoun wrote: post #119

lowkey wrote: post #74

Earlier quoted context omitted.

> With respect to inflation, that’s being directly addressed. Please explain. I don’t understand how that’s true. In last night’s SOTU President Biden said inflation was mostly due to car prices or something equally silly. I don’t see any nation seriously addressing inflation which is officially 7.5% but I believe to be much higher for most.

The 7% inflation number is measured as an increase in prices in consumer goods. Used car prices are up >30% and are a significant piece of consumer spending.

Perhaps because the demand for vehicles post COVID is exceeding supply.

However, is it just drawing forward future demand, which would mean the inflation is temporary?

I mean after a 2 year recession caused by the pandemic, in terms of large consumer items, like vehicles, you'd expect that. People want/need to start travelling again.

Re: Moving money internationally

#196

Post by rswail » Thu, Mar 03, 2022, 2:10 PM UTC

sumanthvepa wrote: post #158

zodiac wrote: post #144

Earlier quoted context omitted.

> Because every single transaction in USD must result in a credit and debit to an account at the US Federal Reserve If I understand it correctly, in this case, isn't the thing prohibiting that transaction the US sanctions (i.e. https://home.treasury.gov/news/press-releases/jy0612 ), rather than exclusion from SWIFT?

Yup. You are right. In this case the US Treasury has frozen the account of the the Central Bank of the Russian Federation(CBR) holds with it. So the CBR cannot transact in USD, and in turn any Russian Bank relying on the CBR providing dollars for purchases of foreign goods and services will not be able transact through that route. It is not exclusion from SWIFT itself that is causing difficulties for Russia in this c…

Thanks for that explanation, clearly separates the action of disconnecting from SWIFT, from the act of the Fed freezing the accounts of the CBR.

I take it that it means there's an account in the Fed that says the CBR has a credit of $650B with it, but it refuses to accept any transactions against that account. So the money is still "there", just can't move.

Re: Moving money internationally

#197

Post by lisper » Thu, Mar 03, 2022, 2:16 PM UTC

rswail wrote: post #191

larrysalibra wrote: post #80

> “Sorry, you have citizenship from the High Risk Country list, accordingly I’m not allowed to open this account for you. This is a commercial decision of the bank and will not be reversed.” This sounds like what I heard from a lot of non-US financial companies when I used to be American and then didn't want to open accounts. Frustrating but predictable and probably intended outcome from regulator behavior.

See FACTA. If an overseas bank (say in Australia) open an account for a US citizen, subject to US IRS taxes, then they have US regulations to comply with for not just that account. FACTA requires an overseas bank to identify US account holders and then report their personal and other details to the IRS, including balances and withdrawals. So now some bank in a foreign country has to not only do due diligence on you a…

Personal anecdote: I was the manager of a small investment fund that invested in a YC company that was acquired by an Australian company. As a result we ended up owning some stock in this Australian company. In order to sell this stock and cash out, I had to open up a brokerage account for the fund (which was an LLC) in Australia. Very long story short: it was a freakin' nightmare. It took six months. All to sell some shares in a public company.

Re: Moving money internationally

#198

Post by rswail » Thu, Mar 03, 2022, 2:20 PM UTC

imtringued wrote: post #156

CyanBird wrote: post #108

Earlier quoted context omitted.

Crypto is infinitely divisible, and because of lack of physicality it does not really suffer from lack of liquidity on the same sense that you can't cut a 20usd bill in half to pay a 10usd item, you just swipe with your phone or wherever e-wallet you use The deflationary bit, is sort of a problem on the centralization of wealth yeah, but that's a macro problem, not a barrier of entry to individuals I think that your…

I don't get divisibility argumebt. Why woukd anyonce care if their Bitcoin can be divided if they owe 0.0001 Bitcoin and Bitcoin suddenly doubled in value which doubled the amount of money they owe without giving consent to owe more money. It is kinda like someone used a technological defect to justify a non negotiated contract change. The person who promised a certain amount of debt obviously promised the earnings o…

How does 0.0001 BTC "suddenly double in value" to be 0.0002 BTC?

What you're actually saying it suddenly doubles in value when converted to another currency.

Just the same as if I owe someone $10, in the same currency, then it doesn't matter if the ratio of the dollar to the ruble doubles or triples at the same time. It's still $10 to both of the parties.

Re: Moving money internationally

#199

Post by rswail » Thu, Mar 03, 2022, 2:22 PM UTC

sailfast wrote: post #105

glerk wrote: post #77

For those saying that crypto is useless, here is a great use case. Authoritarian governments are currently preventing individuals from moving their property across borders. Crypto fixes that.

They're not preventing movement of physical currency - they are preventing use of the existing network and systems to easily move debts around so that it is exceedingly difficult and you have to move physical currency instead of bits / IOUs. Maybe a distinction without a difference to some, but it makes sense that a country that bucks the consensus of a number of member nations would be excluded from a consortium of…

The main difference I can see is that the Fed controls the dollar. It is the central account holder.

Miners are distributed and there is the well known problem of 51% of the mining pool being controlled by a single party, but they would have to control 100% of the mining pool to be the equivalent of the Fed.

Re: Moving money internationally

#200

Post by joshspankit » Thu, Mar 03, 2022, 2:25 PM UTC

LittleNemoInS wrote: post #163

AnonHP wrote: post #92

This is one of those posts where I found very little substance compared to its length. And I didn’t really come out of it with a better understanding of moving money either (as to how correspondent banks ultimately settle the debts, which in turn becomes how countries settle their debts, etc.). I would’ve appreciated more nuance and information on that, even though it’s a vast topic. To simplify heavily, is SWIFT jus…

> To simplify heavily, is SWIFT just an accepted and legal alternative to the hawala system? No. To simplify heavily, Swift is the network on which the hawala system runs. To transfer cash from a bank to another bank, one can : * call the other bank * send an email * send a letter * send a swift message Since transfering cash is not as simple as it seems (trust is the key), using an established network with clear fie…

Another important point in the article is that cash is typically not transferred, but instead (basically) “your account at my bank is credited equal to the amount that you debit from my account at your bank”