Inverting the Bank - Introducing the Wakala Network

Press Release | Round Rock, Texas | Dec 27, 2012

Mevlana Rumi is a well-known mystic and poet of the thirteenth century, named the best-selling poet in the US by Time magazine. In one of his poems, interpreting a Hadith of the Prophet(sm) of Islam, he offers an incisive stratagem to determine the right course of action in any situation: First, he says, consult a man weak in judgment (the allegorical weaker sex), whose “qiblah is scent and color” and whose decisions, driven by desires and greed, are always false. Consult him, and then do the opposite of all that he tells you to do!

Steeped in this wisdom, it becomes easy for us to determine the right course of action in developing a sound financial system in modern times: Simply do the opposite of what a Bank does. So we take the Bank and invert it upside down and that gives us our latest offering, the Open Trade and Wakala Barter Network!

Over the years, the financial system has hoarded up the real wealth of the people - gold and silver, and tucked it away in central bank vaults. Now the sound money and gold dinar movements are undoing the whole thing by distributing the gold back into the hands of the people.

The first step was to make physical metal available to the people. While the Dinar movement is still young and could not leverage the economies of scale available to established coinage in the West, we can give ourselves a pat on our back for being the most competitively priced producers of Dinars and Dirhams for the past three years. Here is a small snapshot of how we fare today compared to all of our fellow brothers working for the same goal.

With the metal distribution in place, it is now time to take the next step of developing an alternative barter trading network on top of it.

Bartering is not only legal, but also beneficial for the economy. As our government attempts to stimulate the economy by pumping more money into it, bartering can also contribute to the same goal of broadening the available monetary base. Although money is not necessarily "capital", but since contemporary economists try to create this impression, we can play along and say that bartering too will free up dollar resources that can be used for other activities, and thus contribute to the same goal that the government is trying to pursue.

The Open Trade and Wakala network is a bartering platform combining people, technology and processes to facilitate smooth conduct of business transactions. And in doing so, it benefits the people instead of the Big Banks.

Where the Bank tends to hoard and consolidate wealth, the Barter Network distributes it. The Bank represents a single point of failure or malpractice. The Barter Network represents multiple nodes in a mesh of human responsibility and interdependence. The bank is a centralized top-down institution. The Barter Network is a decentralized bottom up institution. The Bank uses your money for its own profit. The Barter Network allows you to invest your wealth yourself and for your own profit. The Bank creates more liabilities for itself then it can honor. The Barter Network does not have any paper liabilities, only hard, physical assets that you own. The Bank relies on money-multiplication to gain profit. The Barter Network relies on real, value added services to pay for itself. In short, the Bank does most everything wrong. The Barter Wakala Network does everything right: “Sound” as the libertarians call it; “Halal” in the Islamic community parlance.

The word Wakala, in Arabic, means “Agent”. The Barter Wakala network is a network of agents, working on behalf of their customers, to store their assets and to facilitate their transfer to each other. The Agents, or Wakils, thus allow their clients to efficiently conduct bartering in a manner that seamlessly resembles the traditional financial channel except that its underlying working is completely different.


The Wakala Network will offer the same technology
based conveniences as current financial systems

And best of all, the Bartering Agents are not bankers working for the Big Boys, paid to be always spruced up and smiling to sell all kinds of financial gimmickry with their charm. They are your agents, working for you, with no connection to any central institution.

They are common people, like you and me, coming together to reassert our claim to our economic and financial lives, back from Wallstreet to Mainstreet. Like the highway horsemen who pick-up passengers out of the broken Taggart Comet, they represent people taking back responsibility after the financial behemoth has stalled midway and must be abandoned.

Here is a brief synopsis of how the system will work.

  1. Customer acquires physical metal from any preferred source, including Dinar Wakala, WIM, AOCS Mint, US Mint’s Gold Eagle dealers, or any other local or foreign precious metals provider.
  2. Customer stores the metal on bailment with a Bartering Agent. Anyone can become a bartering agent, and it is expected that they will gradually come to represent different societal segments sharing a common bond including faith, neighborhood, profession or other cultural associations.
  3. The relationship between the Bartering Agent and Customers is not governed by any central institution, but worked out independently between the Customer and the Agent, including the terms of services. The Bartering Agent will act like a full reserve mini-bank, working in close proximity with its participants and getting adequate compensation as reflected in its individual contract with its Account holders.
  4. Bartering Agents will be facilitated by technological support and well-defined standards to conduct, validate, and track transactions. Different for-profit and cooperative entities can compete to provide these services in the most cost efficient manner. Initially, Dinar Wakala will provide a prototype implementation.
  5. The Bartering Agent will hold the assets on bailment instead of a deposit liability, which will provide legal cover to operate it outside of the traditional financial system. The Bartering Network will develop its own processes to
    • Comply with AML (Anti-Money Laundering) regulations from the Financial Crimes Enforcement Network (FinCEN).
    • Report Bartering transaction to the Internal Revenue Service (IRS), and
    • Facilitate participants to comply with Sales, Capital Gains and other Federal and State tax implications through its electronic transaction tracking and reporting feature.
  6. Customers will generally trade in metal hand to hand. However, they will also be given the same technological facilities as they are currently used to, including a Barter Card resembling the traditional “Debit card” allowing them to seamlessly carry out transactions without having to carry coins around. In line with State-of-the-art standards for transaction security, these will be based on ICC / Smart Cards instead of the older magnetic stripes cards.

The system is being commenced in collaboration with the Murabitun of the Americas and Nur-az-Zamaan Institute, which will have three Bartering Agents located in New Bern North Carolina, Philadelphia Pennsylvania and Baltimore Maryland. Dinar Wakala LLC itself will act as the fourth agent in Austin Texas. The Barter platform features will be accessible either from Dinar Wakala website at www.dinarwakala.com or through the Barter Card whose pilot implementation is being done in some shops in North Carolina.

It is expected that this Bartering Network will eventually be interoperable with other sound money initiatives, including e-dinar and the Free Lakota Bank. We will be releasing a recorded demonstration of the system in the coming weeks.

Applications for participating in the pilot implementation are available on our website. Filled applications, along with copy of photo ID can be mailed to our address at 1313 Clary Sage Loop, Round Rock TX 78665, or scanned and emailed to info@dinarwakala.com. Online enrollment of this service is not possible because the application needs to be signed. So even members currently registered on our website will have to send in fresh applications bearing their signature.

We look forward to the community joining us to adopt, support and expand this system further, and helping us strengthen our economy by adopting the pristine principles of sound money as laid down by the founding fathers of this country, as well as the Prophets and Sages from every faith, time and culture.

 

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