Restrictions Worldwide Show Why It’s Vital to Be Your Own Bank
As capital controls and banking restrictions continue to affect various populations worldwide, standing in the way of individuals and their hard-earned savings, some are looking to safer options and even cryptocurrencies. Lebanon, Zimbabwe, and India are just a few of the countries to deal with centralized restrictions on access to money in recent times, but anyone that’s ever had to so much as wait in a long line at the bank knows that when it comes to your money, the more direct and immediate the control, the better.
Bad News Banking
Recent headlines involving major banks have showcased a fact perhaps few would like to face: when it comes to your money in the bank, the bank ultimately has the final say. Roelof Botha, former CFO of Paypal, announced on Twitter Monday that his 20-year banking relationship with Bank of America had been abruptly cut short by the institution with no reason given. One commenter bit back at Botha by saying the same thing happened to him with Paypal, and noting the problems with both centralized institutions stated:
Your livelihood, subject to the mood swings of unknown strangers.
In other news, mega bank HSBC is coming under fire with critics for supposed political motivations in closing a corporate account used to support the protest movement in Hong Kong. South China Morning Post reports that the Prime Management Service Ltd account has been raising funds for Spark Alliance HK, to help with legal, medical and aid services. HSBC would not comment on the individual case, but noted: “If we spot activity differing from the stated purpose of the account, or missing information, we will proactively review all activity, which can also result in account closure.”
Trouble in Other Countries
As news.Bitcoin.com reported last month, the banking situation in politically volatile Lebanon is not favorable. Recent local reports confirm that lenders are re-opening after a week-long strike and a turbulent month marked by bank closure amidst unrest and demonstrations, but that limits are imposed on withdrawals. The Association of Banks in Lebanon stated Sunday that account holders will be able to withdraw $1,000 a week from accounts denominated in foreign currency. Transfers of money out of the country will be limited to “urgent” matters.
One report from international media outlet rfi notes: “The Lebanese pound has been pegged to the US dollar at around 1,500 for two decades … But amid the deepening economic crisis, the exchange rate in the parallel market has surpassed 1,800 Lebanese pounds for every dollar.” Authorities in Lebanon are refusing to call the new policy capital controls.
Plagued by demonetization, banking scandals, cash shortages and a government that doesn’t seem to want to move when it comes to crypto, residents of India haven’t had an easy time of things in recent years. Depositors at Punjab and Maharashtra Cooperative (PMC) Bank found out the hard way that governments and centralized lending institutions cannot be fully trusted in September, when the Reserve Bank of India (RBI) placed severe restrictions on the bank’s 137 branches and initially limited withdrawals to a total of about $14 per account for six months. The limit was later raised slightly, but turmoil continues as protests, strikes and even reported deaths are occurring in the wake of the financial panic surrounding PMC and other cooperative banks.
The re-emergence of paper and coin Zimbabwe dollars after a decade of absence was meant to steer residents of the country away from the black market for USD and reliance on mobile payment services like Ecocash, which sellers were using to charge high premiums for access to cash. The result so far has been frustrating for some Zimbabweans, however, who are finding that the limited access to the new money (currently set at around $20 per week) is nowhere near adequate. One pensioner told Reuters:
I managed to withdraw 150 dollars but it is not enough to buy anything. The banks should do something about the limit, maybe increase it to 1,000.
Hyperinflation and unemployment continue to wrack the struggling economy, and centralized controls on markets do not seem to be helping the situation.
Crypto Allows People to Be Their Own Bank
Though former U.S. President Barack Obama once famously stated of encrypted technology and cryptocurrencies that “If in fact … government can’t get in, then everybody’s walking around with a Swiss bank account in their pocket,” some people are beginning to see that as less of a problem and more of a good thing for society. Given the current mess of capital controls, banking restrictions and irresponsible economic policies such as QE and negative interest rates being employed globally, becoming one’s own bank via crypto presents an alluring — if sometimes challenging — option.
Private, peer-to-peer crypto markets and initiatives such as local.bitcoin.com and Eatbch allow struggling individuals in hyper-inflated and suffocating economies like Venezuela a route by which to preserve value, trade more freely and keep pushing forward. The more adoption that occurs, the greater the liquidity and potential for individuals all over the globe to use their money when and how they want, regardless of what the financial cattle corrals called “banks” may say.
What are your thoughts on becoming your own bank? Let us know in the comments section below.
Image credits: Shutterstock, fair use.
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