Crypto Capture of Foreign Aid | Hacker News Reader

Crypto Capture of Foreign Aid

nber.org

100 pointsbko37 comments

It is common to hear phrases such as "Mr 10 percent" as a reference to powerful leaders in various countries. For instance, Pakistan President Asif Ali Zardari is called "Mr 10 percent". 10 percent cut from every contract. This is not unique to Pakistan. In India, many regional party leaders (basically, they and their family own the political party) want 20 percent cut.

When one hears 2-6%, it is just the floor.

Don’t need to look that far. The person in the White House is doing the same thing.

The corruption elsewhere is of different order. In US, one can bid up four times normal, one at least delivers the quality. Elsewhere, roads fail, buildings fall, bridges collapse, pipes burst upon the first use, ...

If they are built at all.

When was the last time the US built anything at all?

We did just break ground on the new tunnel from NJ to NYC for trains. We'll see how that plays out in the next 1-2 decades.

The US manufactures more goods annually than Germany, Japan, and S. Korea combined.

Isn't its population also larger than all three combined? It seems like some per capita measurement might be more telling here.

If you go that route, then the US is ahead of China for manufacturing output per capita. Which probably isn't what you wanted to hear.

That's quite optimistic. How many months of further development does a deal usually need to have something sizeable that can collapse?

I developed a three-tier corruption test in US:

1. Perfect roads. Little visible construction despite high traffic: no corruption.

2. Awful roads. Almost no visible construction - medium corruption.

3. Continuous years-long construction. Roads always semi -closed, semi-permanent "work zone". When one construction ends, another immediately starts - extremely high corruption

I think you must consider geology and the economic health of each area together.

That's why in Northern California all the roads are constantly under construction, but in Finland they're perfect. I was thinking that in California one needs to get an SUV simply because a sedan's suspension will not last much longer

We get the roads re-surfaced at a frequency that, magically, mirrors elections.

Zany stuff.

> In US, one can bid up four times normal, one at least delivers the quality.

Did you miss the entire Lincoln Memorial reflecting pool disaster?

https://www.nytimes.com/2026/09/11/climate/reflecting-pool-c...

Or alternately, why should anyone believe that was a one-off event and not the new normal for recent no-bid contracts being awarded by an obviously corrupt administration?

$TRUMP coin is a way for foreign and domestic players to stuff money into his pockets.

during the nineties there was this joke going around in Spain:

the leaders of Germany, France, and Spain meet to discuss infrastructure...says the German chancelor: see this autobahn? 10% in my pocket...comes the French president and says: this autoroute? 20%...ha!, the Spanish prime minister says, you don't see no autopista here do you?

Is everyone here so afraid of downvotes or out of touch that they don't remember "10% for the big guy" Biden? I know the US doesn't exactly get "Foreign Aid" but our politicians sure do, and it's a broad spectrum problem.

This is relevant:

https://theleahfiles.substack.com/p/the-currency-killer-part...

Did you know Tether (cryptocurrency company) is in the top 20 USD treasury holders, more than most countries?

And Lutnick is the manager of those funds, or his sons are (silly mistake!) because he divested completely.

I know nothing about crypto, but wasn't one if its selling points that its "digital gold" for people without stable fiat currencies?

You send aid to a drought-stricken farmer to some sub-saharan region with ample cheap data but no (stable) banks, how...are they supposed to store the money?

World Bank doesn’t typically give money to people. They fund development projects.

This. All the perverted incentives and money wasting inefficiency of federal grant funded local projects but for poor brown people half a world away.

That's very naive of you to think most of it isn't ending up in Israel one way or another.

>They fund development projects.

So they fund wages among other things?

Crypto was DoA as the architect had a delulu view of humanity.

So the best realistic alternative is what, AWS IAM for autonomous economic actors?

May I present to you the humble briefcase full of cash?

I think “autonomous economic actors” is similarly, to quote GP, delulu.

Currency as a tool is inextricable from currency as a representation of interconnected states and state coercive power about what can be done with it. The maximum-autonomy other end of the spectrum leads to feudalism—not equivalent to feudalism but actual feudalism.

Low-currency-autonomy systems like we have can also produce bad outcomes. But sprinting for the other end of the spectrum guarantees them.

Spot on

Crypto has been sold many many ways, but most of it is not a stable store of value.

Stablecoins are what are supposed to be stable sources of value, but Zeke Faux's book Number Go Up points out how opaque and unaccountable the companies managing these currencies are. From his reporting, their "tractor app" appears to be not so much farmers in sub-saharan Africa receiving aid payments but criminals looking for anonymous ways to transfer lots of money.

It must be noted that not all of the crypto funds are a form of stealing the aid.

Crypto is really handy and useful for actual money management. It's heavily used in Ukraine in the army and shadows the official monetary system.

For example it's close to impossible to use fiat funds to purchase X for the combat units: you'll need a separate department of lawyers just to manage that one procurement documentation. In a war you'd rather not do that.

Crypto? No problem. Payment sent, X received.

Lots of cases like that.

From this exact blurb:

> We estimate an implied leakage ...

So the estimation became almost a fact in the title? What's the equivalent of clickbait in papers?

The rest of that sentence:

> ... of 2 to 6 cents per aid dollar, which amounts to roughly 1.7 to 4.4 billion dollars of aid diversion across the tranche arrivals we study.

This submission is not following HN news for submission titles.

This isn't a clickbait in the paper, but by the submitter.

Why does literally every single item on Hackernews have some replyguy screaming about clickbait? Is there therapy for that? Do you understand how headlines work? What part of 2 to 6 looks like "not an estimation"?

Edit: HN title used to be "Around 2-6% of World Bank foreign aid got siphoned into crypto wallets"

Original post: While you're being rude and it would be worth cutting the first half of your comment, that's a good point that "2-6%" is still clearly an estimation.

Does the movement of money increase when foreign aid is distributed? If you were to assume the proposition of the proponents of cryptocurrency that it works in a manner similar to money, wouldn't the evidence provided here also support the conclusion that it is working as intended?

If you can imagine a valid world in which a measure is an indicator of a property and also imagine a valid world in which the same measure is an indicator of its inverse, all you have done is proven that the measure cannot be used to determine the truth of the property.

foreign aid is used for both legitimate purposes and all kind's of nefarious purposes.

eg say a foreign rich gvt wants to stoke up civil unrest via NGO / civic organizations - they bring in foreign cash (pallets loads) - then that money goes into the black market destabilizing exchange rages, some of it into crypto as being said, some to bad actors.

such is life.

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