"Flying Money" (Feiqian)

What is it? 🤔‍

"Flyingmoney," or feiqian, originated during China's Tang dynasty (618–907 AD) as a revolutionary method for merchants to avoid the risks and logistical challenges of transporting heavy coinage over long distances. Merchants deposited their coins in one location and received certificates that could be redeemed for the equivalent amount elsewhere. This system was not only convenient but also significantly safer for traders who traversed vast and often perilous routes.

During the Song dynasty (960–1279 AD), the system evolved further. The government began issuing its own paper money, institutionalizing the practice and setting a precedent for state-controlled monetary policy. This marked a significant advancement in the financial systems of the time, allowing for more fluid and efficient trade across the empire​​​​​​.

Why is it a problem? ⚠️

In modern times, the principles of the feiqian system underpin many informal value transfer systems (IVTS), which operate outside formal banking channels. While these systems facilitate legitimate business transactions and remittances, they are also exploited for money laundering. The anonymity and efficiency of these systems make it challenging for authorities to detect and trace illegal financial activities, especially those linked to drug trafficking and other organized crimes.

Chinese underground banks, leveraging the feiqian principles, have become crucial for transnational criminal gangs, enabling them to launder money quickly and discreetly. This not only undermines financial regulations but also fuels illegal activities on a global scale

Where is it being used? 🌐

Today, modern adaptations of the feiqian system are prevalent globally, particularly in regions with significant Chinese communities. Southeast Asia, Europe, and North America see extensive use of these systems, which are pivotal in laundering drug money from Mexico into the US and Europe. Platforms like WeChat play a crucial role in coordinating these operations, making it easier for criminals to transfer large sums of money discreetly and efficiently.

In regions like Southeast Asia, these system sare deeply integrated into the local economies, often used for everything from remittances to large-scale illicit transactions. Recent reports highlight significant cases of money laundering facilitated by these networks, further emphasizing their global reach and impact

How are governments trying to solve this problem? 🛡️

Governments around the world are stepping up their efforts to combat the misuse of informal value transfer systems like feiqian. Key initiatives include:

• International     Collaborations: The US and China have launched a bilateral forum to tackle money laundering, marking a significant step in mutual cooperation despite political tensions. This forum aims to enhance information sharing and joint enforcement actions against money laundering networks
• Regulatory Measures: The US Treasury Department has highlighted the role of Chinese underground banks in its National Money Laundering Risk Assessment reports, advocating for stricter regulations and more robust financial oversight mechanisms
• Anti-Money     Laundering Campaigns: Countries like Singapore have launched significant anti-money laundering campaigns, leading to the arrest and prosecution of individuals involved in these networks. These efforts include tightening financial regulations and enhancing monitoring of financial transactions. 🚨 The ancient feiqian system has evolved, presenting modern challenges that require innovative solutions. Understanding its historical roots and current adaptations is crucial in the global fight against money laundering. 🚨

How ZeroCode Can Help

At ZeroCode, our AI-enabled low-code/no-code platform is designed to empower financial institutions and regulatory bodies to combatmoney laundering efficiently. Our offerings include:

• Rapid     Deployment: Quickly build and deploy applications to monitor and     analyze financial transactions without extensive coding knowledge.
• AI     Integration: Utilize advanced AI algorithms to detect suspicious     activities and patterns that may indicate money laundering.
• Custom     Solutions: Tailor solutions to fit the specific needs of your     organization, ensuring compliance with international regulations and     enhancing security measures.

Learn more about how ZeroCode can fortify your financial systems against evolving threats by visiting our website or contacting usdirectly.

Engage with Us!

Have you encountered or studied similar systems in your region? Share your insights and experiences in the comments below! Let's delve deeper into the intricate world of informal financial systems together. 🌏💬