To listen to an audio version of this article, please use the play button above.
—————————————————————————————————————–
This blog is an attempt to explain the world of international finance from a bird’s eye view. While it was written with a layperson audience in mind, some of my friends in this field who have read these posts, found the posts to be useful to understand the fundamentals. So if you are new to the world of international finance or are familiar with it at some level, you will still find these articles helpful to some degree.
If you are an expert and want to offer some suggestions or contribute subject matter, you are welcome and your contributions will be cherished!
A good way to understand the world of international finance is to take a scenario & see how things work. For this purpose, we will take the restrictions put on Russia by the west subsequent to its “special military operations” in Ukraine that started in Feb 2022. Remember, we aren’t taking any sides, but are using the situation to understand the world.
Some articles of this blog are standalone and can be read independently. However, if you are someone who would like to follow a structure, then you will find reading in the following order helpful.
As a first step, we need to become familiar with “what is money”. Yes we all use it, save it and grow it, but do we know what exactly it is? Read it up in Money money, who art thou?
Have you wondered how international trade works? And why most transactions in the world are performed in USD.Find out the answers in
Trade across borders — and how choosing the right currency matters
and in
The world of International finance works on a distributed giant machine composed of banks. Read more on how they play a role in facilitating trade across borders in Gods of Trust!
and how international payments get paid in Show Me My Money!
Or how the tools of international finance play a big role in Geo-Politics in The Kill Switch.
The thing with adaptive systems is -they adapt. If one of the players don’t play nice and makes a move that hurts others, everyone takes notice. A famous saying in geo-politics is, “capability is more dangerous than intent“. This is to say, when a player accumulates an advantage, whether the intent was good or malicious doesn’t matter. Because intentions can change at a moment’s notice but a capability may takes years to build. So if a country has a finger on the kill switch, some others will work on building another capability and a few others will try to make the kill switch useless. This is a relentless game. The next series of posts will look at the challengers to the current mechanism of international finance. How some are red herrings, some are just minor inconveniences and some, turn out to be more serious. In the first of the articles in this series, we see how some of the challengers have challenges.
A new kid is on the block, a money kid! It looks like its parents, but is more sophisticated. It is a simple, yet a powerful new form of money. And it seems to be blooming across the world. Yes we are talking about CBDC. What is it you ask? Find out in CBDC- A new form of money.
In, the shifting gears of cross border payments with CBDC, you will read about why several countries are implementing CBDCs and the different collaborative initiatives between countries in the world in this area.
We look at one of the most promising collaboration projects that is set to revolutionise payments in Let’s talk mBridge. Read how it reduces risk, cost & transfer time for all parties – countries in general, corporates that do business internationally and common people like us.
Supplementary articles:
These are “explainers” on some key concepts that assist the understanding of the main theme will also appear in this blogpost. They can be read anytime or as a supplement to the main ones.
Like the one on the SWIFT network at the below link.
Happy reading. Do let me know of your thoughts.
Leave a Reply