The law of unintended consequences strikes again. This time NGOs and political leaders are declaring a "humanitarian" crisis.

It is both sad and amusing to watch members of the U.K. Parliament proclaim disgust with Barclays' (BARC) decision to sever relationships with money transfer agents that facilitate remittances to Somalia. The legislators are the ones who blindly supported the imposition of restrictive anti-money laundering guidelines in the first place, even if they are simply following the U.S. lead.

Now these same British MPs, some with large African migrant population constituencies, have pressured Barclays to agree to a 30-day stay for some agent accounts that will be ending in mid-August.

Barclays is scheduled to close the accounts of about 80 money-transfer businesses because the bank fears that proper checks are not in place to spot criminal activity and that the funds could go towards terrorist financing. Among the banks, there is justified concern that the U.S government's forced $1.9 billion settlement against British bank HSBC for weak money laundering controls could also affect the business of overseas remittances. So, Barclays is merely exercising caution. "This is solely about the company's controls, not where they send money to," a Barclays spokesman told American Banker.

Apparently the money transfer agents operating in the U.K. do not have a problem with law enforcement or regulators because the funds transfers that they make are serving humanitarian purposes such as feeding children and purchasing medicines. The agents make the point that "cash going to extremists in Somalia is sent in sacks by plane, not from a London suburb a few hundred dollars at a time," according to The Economist magazine.

Dahabshiil, the largest Somali money-transfer agency in the UK, estimates that $500 million per year is sent from Britain to Somalia. About one-third of Somalia's $2 billion gross domestic product enters through money transfer businesses.

Without a formal banking sector, millions of Somalis rely on money sent from abroad. Underground agents could potentially fill the void. Alternatively, migrant workers could simply transfer new cryptographic commodities like bitcoin, which are not against the law.

Also included in the countries put on notice by Barclays are Nigeria, Ghana, India, and Bangladesh with the resulting impact certain to be felt by Somalia's neighbors, Kenya and Ethiopia.

The wholesale closure of accounts with U.K. money-transfer businesses parallels the situation in Minnesota last year when a local bank, citing the risk of strict penalties, ceased transfers to Somalia for migrants wanting to send money home. Wells Fargo (WFC) and U.S. Bancorp (USB) were dragged into the fight as customers threatened to close bank accounts at the two leading banks in the market unless they offered remittances to Somalia. Banks face a no-win choice over remittances.

A chilling effect in the provision of certain banking services has been created and we are witnessing its global expansion. If banks sufficiently fear punitive action from the authorities, it matters not whether an actual law is being violated. The fear of prosecution is enough to warrant an abundance of caution.

"We are regulated by the U.K. government. We are a licensed institution as is any other legal company," Abdirashid Duale, CEO of Dahabshiil, told the news service IRIN. "Dahabshiil's anti-financial crime controls are fully compliant with all applicable legal requirements and industry best practice and have been regularly audited by HMRC, the UK's customs and tax department, for a number of years on behalf of the Financial Services Authority, without any adverse findings."

Omar Abdinur, managing director of Tawakal U.K., another remittance firm affected by Barclays' decision, told IRIN, "There is no other bank willing to open an account for us in the U.K .. We have approached many banks but they are not willing. They say that money transfer is a risky business, but there is no single case in the U.K. where it has been proved that our firms are under-regulated or that we have transferred money to people under sanctions."

The chilling effect running through the banking industry goes well beyond hawala agents and money transfers to the horn of Africa. Last week in the United States, Amagi Metals, a broker of gold, silver and copper, had its account at Bank of the West closed with little warning simply because the firm accepted some payments in the digital currency bitcoin. These types of incidents are on the rise.

Financial journalist Christopher Alkan calculates that the U.S. approach of extending the scope of its laws beyond its territory will eventually backfire.

Recognizing that the Barclays action on Somali transfers is a private commercial decision based on calculated risk-reward parameters, the bank should be applauded for staying in the game as long as it has, remaining one of the last few financial institutions operating with the money transfer agents.

According to The Economist, "Some observers are calling for the creation of new institutions that could replace private banks. One suggestion is a 'remittance bank' hosted by the UN or a multilateral agency. Another is a code of conduct worked out by remitters, banks and regulators."

Adding to that sentiment and despite the fact that government has gotten us to this crisis point, Leon Isaacs of the International Association of Money Transfer Networks says, "This needs to be driven by government or the banks won't get the comfort they want." Worldwide financial inclusion is at stake.

Increasingly, it's looking like the solution may reside in not going through the banks or government at all.

Jon Matonis is the executive director of the Bitcoin Foundation and an e-money researcher and crypto economist focused on expanding the circulation of nonpolitical digital currencies.