Written by: Xiaobing, Shenchao TechFlow

Recently, “A Letter to Grandma” has taken the internet by storm. With a Douban score of 9.1, it is the highest rated domestic film since the 21st century and a dark horse at the May Day box office, having surpassed 200 million and still continuing to grow.

The film tells the story of a letter that arrived five decades late. In the 1940s in Chaoshan, a man went abroad to make a living, leaving behind a young wife and three children. He died in a foreign land, and the innkeeper's daughter, out of kindness, wrote letters to his wife in his name for 18 years, sending money for 18 years.

Those crumpled letters in the movie are called “pi” in Chaoshan dialect. Letters and money sent back by overseas Chinese are known as “qiao pi.” It may sound rustic, but if you know a bit of financial history, you'll understand:

This thing is one of the most astonishing cross-border financial networks in human history. It predates Swift by a hundred years and blockchain by a hundred and fifty years. It is completely private, peer-to-peer, without central clearing, functioning across sovereign boundaries, supporting nearly half of modern China's international balance of payments.

Its entire credit foundation is encapsulated in a Chaoshan proverb: "Trust is greater than life."

An Overlooked Financial Infrastructure

First, let's look at some numbers, and you'll see just how impressive this thing was back in the day.

The origins of qiao pi can be traced back to the mid-19th century. The earliest physical qiao pi found dates back to 1881, but it may have been in operation even earlier. It wasn't until 1979 that this business was incorporated into the Bank of China system, marking the end of an era, operating for over a hundred years in total.

Approximately 170,000 existing archives have been recorded, with Guangdong accounting for 160,000 (of which more than 100,000 are from the Chaoshan area), and Fujian about 10,000. This is just what has survived. At its peak, the funds flowing into China through the qiao pi channel reached hundreds of millions of dollars annually. During the war between 1937 and 1945, remittances through qiao pi accounted for more than 50% of China's foreign exchange income, representing a significant portion.

Chen Jiageng alone relied on qiao pi to remit money back home, establishing Jimei School in 1913 and Xiamen University in 1921. A complete modern university was built from crumpled letters.

Even more astonishing is its operational mechanism.

For most of the time before 1979, the network operated almost entirely without any government endorsement, central banks, or official clearing systems. No Swift, no central bank foreign exchange management, no cross-border interbank accounts, nothing at all.

What did it rely on? Three things: water customers, pi bureaus, and something called trust—something that is most lacking and most valuable in today’s financial industry.

Water Customers: The Human Node Version of Blockchain

The earliest qiao pi had no bureau, relying entirely on "water customers."

Water customers are professionals who travel back and forth on red-headed boats between Southeast Asia and Chaoshan, Minnan. They go to mines, rubber plantations, and docks in Southeast Asia to find fellow townsmen, collecting letters and money house by house, then stuffing them into their belts. The money is physically tied to their bodies, and upon returning to China, they deliver it house by house to the intended recipients.

Sounds primitive? But this system possesses several characteristics that would make modern financial experts exclaim “wow”:

First, it is peer-to-peer. From the moment the remitter hands the money over to the water customer to the moment the recipient receives it, this money never passes through any bank account or any sovereign currency system.

Second, it is identity-verified. Water customers are usually from the same hometown, familiar with both parties. This serves as a form of authentication more reliable than an SSL certificate; you can run but can’t hide. In a Chaoshan village, everyone knows who lives where and the connections among relatives; the water customer knows it all by heart.

Third, it has a default rate approaching zero.

This point deserves to be highlighted. Water customers from the 19th to the first half of the 20th century had no collateral, no insurance, no legal recourse. They often carried the entire savings of dozens of families in a village, equivalent to potentially millions of RMB today. If a water customer absconded, nobody could catch him or compel him to pay.

But they simply do not run away.

Why? Because the essence of this business is that trust serves as the only collateral. If a water customer runs once, every connection he has with hometown fellows on both sides would instantly disappear, rendering him a pariah within the Chinese community for life. The cost of being permanently banned by the entire community far outweighs any legal punishment.

Pi Bureaus: From P2P to a Financial Institution Network

As the era of water customers progressed, some began to specialize in operations, leading to the emergence of pi bureaus, dedicated businesses for qiao pi.

The emergence of pi bureaus upgraded qiao pi from “personal peer-to-peer” to an “institutional network.” However, unlike modern banks, pi bureaus have always been private, family-operated, and networked, with one end in Southeast Asia and the other in the hometown, woven together by ties of kinship and family credit.

To what extent is its capital flow sophisticated? Let’s break it down:

Step one, a Chinese person A in Southeast Asia walks into a local pi bureau, hands over 100 Thai baht, and tells the bureau to send the money to their family B in Chaoshan.

Step two, the bureau immediately issues a "pi" (letter + remittance form) to A at the current exchange rate, noting an amount that may be in Hong Kong dollars or silver dollars, almost never in Thai baht.

Why not Thai baht? This is one of the smartest aspects of qiao pi. Early cross-border pi bureaus long used Hong Kong dollars as the settlement currency because the Hong Kong dollar is pegged to the pound, has good liquidity, and is recognized throughout Southeast Asia, effectively serving as a super-sovereign settlement currency chosen spontaneously by the East Asian Chinese community.

This sounds a bit like today’s crypto circle’s logic for the demand for USDT/USDC, which is cross-border, circumvents exchange rate controls, deep liquidity, and recognition by all participants.

Step three, the Southeast Asia branch of the bureau ships the letter and remittance instructions back to the corresponding bureau in Chaoshan, but the money may not necessarily be physically sent back.

This is crucial. A mature pi bureau would establish long-term relationships with local import-export businesses. Money sent by overseas Chinese to their hometown (Southeast Asia → Chaoshan) can be directly used to pay for goods imported from China (Chaoshan → Southeast Asia). The capital flow in both directions offsets each other, meaning that the actual cash needing cross-border transport may only be a small portion of the difference.

This mechanism has a trendy name today called “netting”—the Swift system handles hundreds of trillions of dollars in transactions every day, which essentially does the same thing that pi bureaus were doing a century ago.

Step four: After the bureau in Chaoshan receives the instruction, it sends "pi jiao" (delivery personnel) to deliver the message at home. The delivery personnel typically walk dozens of kilometers, going from house to house, reading and writing responses for illiterate mothers-in-law and daughters-in-law, confirming receipt. This "return pi" then goes back along the same route to Southeast Asia, thus completing the entire transaction loop.

There are no bank accounts involved, no government regulation, and no central clearing system throughout this process, yet it operated steadily for a century.

Underground Pi and the Dongxing Remittance Route

The most magical story of qiao pi took place during wartime.

In 1939, the Japanese invaders occupied Shantou, completely severing normal pi bureau remittance channels. 500,000 families from hometowns faced losing their livelihoods.

At this point, overseas Chinese did something historic, they created an underground remittance route.

Goods would be shipped from Southeast Asia to Haiphong in Vietnam, entering through the Dongxing border at the Sino-Vietnamese border, then carried into Guangxi by porters before finally diverting back to the Guangdong hometowns. This route was called the “Dongxing Remittance Route,” at its peak allowing remittances to still reach tens of millions a year.

The sovereign financial system collapsed in the midst of war, while a grassroots financial network set up a completely new channel.

Even more incredible was the “hidden pi,” whereby to evade checks by Japanese troops and later the Nationalists, overseas Chinese encoded the remittance amounts in the letters. “One bag of rice” represented a certain number of silver dollars, “five salted fish” represented a certain number of Hong Kong dollars. The entire coded language system operated in the minds of water customers and delivery personnel; even if the enemy intercepted the letters, they would not make sense of them.

During the war, Zhou Enlai personally expressed his gratitude in a letter to Cuban-Chinese Tan Yixi in Wuhan, as this overseas Chinese had hidden anti-Japanese donation money in qiao pi that was sent directly to the Eighth Route Army's office in Wuhan.

What does this mean in today's context? It’s equivalent to saying that under the circumstances where the dollar is sanctioned, Swift has been cut off, and bank accounts are frozen, overseas Chinese rely on a grassroots consensus network to still deliver equivalently tens of millions of dollars each year to designated recipients.

Is this not “anti-censorship transactions,” “off-chain accounting systems,” or a “grassroots stablecoin clearing network”? Yet its inventors were unaware of these terms; they only knew that: grandma at home is waiting for money, children need food, and the country is at war.

A Financial Miracle That Can Never Return

Qiao pi, blockchain, and Swift are different interpretations of trust.

Swift is a collaboration based on national trust; it relies on sovereign currencies, central banks, commercial banks, and regulatory coordination, with its strength dependent on the stability of the entire international order. Crypto is trust derived from mathematics and code, attempting to replace trust between people and institutions with cryptography and consensus algorithms.

Then what about qiao pi?

The essence of qiao pi is trust based on kinship, locality, humanity, and pledges. It lacks mathematics but possesses family trees, accents, and dialects; the core of its operation lies in a cultural consensus that treats default as “social death.”

This is what modern finance desperately needs: trust itself is collateral.

All so-called “innovations” in today’s financial industry are fundamentally ways to compensate for the loss of this quality: collateral, guarantees, regulation, insurance, legal recourse, credit scoring, KYC, AML. We are using increasingly complex systems to attempt to recreate the simple state of “a water customer carries an entire village's savings and does not run away.”

The difficulty of this matter can only be gauged through specific individuals.

In the Guangxu era, a Thai Chinese named Yang Jie sent a qiao pi back home, containing only ten words: “Upon receipt, please redeem my daughter to come home.” At that time, remittances were interrupted, and his wife was forced to sell their daughter. After learning this, his heart ached, and in haste, he sent back 50,000 yuan, and apart from “upon receipt” he could not write anything else.

A female Chinese vendor on the streets of Singapore, Chen Lianyin, could no longer live comfortably herself, but upon hearing her mother had injured her foot, she scrimped and saved to send money back home: “Adults often lack three meals, leading to foot injury, making it hard to walk with a cane; upon hearing this, the daughter cannot hold back tears.” She called this the crime of familial discord.

The last qiao pi received by grandma in the movie wrote: “Though Siam is distant, my heart is sending, though apart in body, please be safe, we shall reunite.”

The amounts of qiao pi were mostly 5 Hong Kong dollars, 10 Hong Kong dollars, 50 Hong Kong dollars, sending a little with each letter but year after year. Over a century, generations of Chinese people, tens of thousands of pi bureaus, and hundreds of thousands of water customers and delivery personnel sent tiny amounts of money and messages of safety across wars, revolutions, turmoil, and famine, punctually delivered to the doorsteps of Chaoshan, Minnan, and Wuyi, homes they may never have the chance to return to.

The financial engineering difficulty of this matter has yet to be reproduced by any modern payment system under similar conditions.

And the entire technical stack it operated on was merely: a red-headed boat, a water customer with a familiar accent, a faded belt, and the four characters “Trust is greater than life.”

All the grand narratives of the crypto circle over the past decade—decentralized cross-border payments, permissionless financial networks, global clearing bypassing Swift, grassroots stablecoins, trust as collateral—have already occurred in those long-forgotten villages along the southern coast of China, in the hands of illiterate grandmothers and daughters-in-law, and among uneducated water customers for a full century.

This is a story about "trust" that we may never return to, both the most simple and most magnificent.

This article is dedicated to all who have ever written, signed, entrusted, or received payments on yellowed pages.

And to all those still trying to rebuild such trust networks today.