Trust is a fundamental aspect of any given functional society. However, since late September 2001, the UN approach to global financial governance appears to have been driven by distrust of other less formalized money or value transfer (MVT) systems. At the core of this ‘Global Regulatory Effort’ (GRE) is UN Security Council Resolution (UNSCR) 1373, which mandated that states legislate to regulate all informal MVT systems. In particular, the MVT system known as ‘hawala’ was implicated by US authorities in the funding of the acts of terrorism committed on September 11 in 2001.
Although the focus of this multilateral effort was predominantly on the Islamic hawala system, the regime targeted any MVT system not linked to an established commercial banking operation. In this way UNSCR 1373 put a line in the sand between trustworthy and untrustworthy financial service providers. The necessity of this unprecedented step was ostensibly in order to prevent any future global acts of terrorism and maintain international peace and security. However, the regime’s approach implicitly legitimized formal Westernstyle financial systems while delegitimising all others. This study contends that a significant implication of this securitized approach to global financial governance was the creation of a Global Trust Conflict (GTC).
The Global Financial Crisis of 2007/2008 and the adoption of Bitcoin as legal tender by El Salvador emphasize the significance of this Conflict. Moreover, the emergence of blockchain technology, Decentralized Finance (DeFi), and Distributed Ledger Technology (DLT) represents a new and challenging front in which the implications of the Conflict may be significant. Particularly in terms of the prevailing nature of trust provision services throughout the global economy. As a result, new possibilities for the shape of global order have arisen as state and private interests compete to influence the future of remittances. This research argues that the UNSCR 1373 mandate is anti-competition and served to institutionalize distrust of non-bank MVT systems. This includes traditionally informal remittances and emergent decentralized value transfer systems built on blockchain technology. This thesis concludes that a Global Trust Conflict exists, which constitutes the most significant barrier to regulatory efficacy and compliance aimed at MVT systems
