I am not saying we should hold up banks, or commit crimes, but in very recent years, I have had at least three experiences with my own bank and my relatives bank that made me really sit back and ponder.
A relative was going to gift me a (fairly, not huge) sum of money. The bank refused to allow them to wire transfer. As in, flat out, nope, you want to wire transfer more than say $5,000 and it is not to a corporation (e.g. mortgage, car company, etc, but to an individual) the answer is NO. This was truly eye-opening to me. This was their money. As in, hey, I worked for this money, and I would like to spend it. And... the answer is no. Of course, I understand, they can just cut a check, or make a money order, but that adds a delay, and hey, what is the bank there for? To add delays?
A very similar thing happened to my bank. I literally was going to purchase a used item, it was a few grand, I went in, said I wanted a few grand from my account. The answer was NO. Write a check or grab a money order. Hey, regardless of the situation, regardless of "perhaps this person is doing a shady cash-only deal", that money in the bank is technically MINE, right?
NO, its not my money. Its the banks money. I guess possession is really 9/10 of the law. After a few of these incidents happened and I started talking to friends, I head similar stories over and over. I find it amazing that citizens are pretty calm about this. It took a fair amount of emotional intelligence to not freak out in the lobby when the teller tells me the money I really worked for I just can not have right now.
And the reason why is AML. Your experience is bad, but have you seen the public reaction when a bank has been involved in money laundering?
It is irrational (and strange, countries in the EU will happily launder your money, some domestic banks still accept suitcases full of cash in the basement but the rage is all directed to US/UK banks where money laundering is almost impossible without blackmailing someone in AML...this happens, but it is fairly rare...and risky because most banks now have teams of people watching their AML staff, following them outside work, going through their emails, etc.).
The solution is simple: remove AML/KYC regulations. Let police investigate and find evidence of crimes. This isn't the job of banks, banks aren't the police, AML departments are basically run as private police departments, and the false positive rate is (unsurprisingly) through the roof. They also don't do a particularly good job with true positives either: some obscure Kazakh politician wants to open an account with $5m...okay, there is no Wikipedia page for him, he has provided proof of income, you suspect it is forged, you call the Kazakh police, they tell you it is legit...it is very hard to get right because you don't have any legal investigatory powers.
This is spot on. Although I disagree with the removal of AML/KYC regulation, this is indeed the reason why it's so complicated. HSBC was fined heavily and only came out of judiciaral control recently because they didn't care enough about money laundering. All the banks are scared to shit to be pinned by the regulator now, so that's what you get.
It’s not even the bank’s money but the bank’s debt to you. When you give a bank money you are accepting an IOU with pages of conditions because they lend out most of it and do not keep enough money to pay everyone back. Banks don’t want withdrawals because that limits their ability to lend and make profits off the interest etc plus capital control laws are common to prevent bank runs etc, so they erect barriers to withdrawal and can prevent it entirely. When you’re prevented from withdrawing your money that is a sign the loan you gave the bank went bad.
No sane seller is going to accept a check or MO for something of value - too high a chance for scams.
I suspect most problems like you've encountered are bank policy due to increasingly stringent anti-money-laundering regulations. But, not sure how "use a check" is helpful since nobody would every accept one.
Do PayPal or Venmo allow large transactions? That might be the best option today?
What are you talking about? This is what cashier's checks are for. Every sane seller is going to accept a cashier's check. That's what they're for. You can even call the bank that issued it to verify it's valid.
Of course you use a check. Not a personal one, but a cashier's one.
A cashier's check is equivalent to cash without the hassle, because it's backed by the bank that wrote it. They already took the money out of the customer's account, so there's no chance of it bouncing.
Sorry, but the bank is giving you totally reasonable options here -- you can always write a check to friend/family who trust you (know it won't bounce), and you can always get a cashier's check to pay someone who doesn't trust you (e.g. buying a car).
Banks have daily and monthly limits on how much cash you can withdraw, for reasons of both logistics, fraud, and crime. And it's similar with wire transfers that have a risk of fraud, because they can't be reversed.
Seriously, why couldn't your relative send you a check? And why couldn't you get a cashier's check for the used item? That's how it's always been done, for many many decades.
Yes it's your money and you can withdraw it any time via check or cashier's check. The other options like wire and cash are extra options that come with understandable limitations. But there's nothing wrong with checks.
>Seriously, why couldn't your relative send you a check?
We wanted it now and I was 1000 miles away. A wire transfer before 2PM local time would have been in the bank that day. They getting a MO or Certified check and sending it overnight now costs more money and adds a possible 24 hour delay, AND some banks do not cash cashiers checks, but put a hold on them. They CAN (IIRC) hold it for 9 (yes NINE, I have literally had this happen) days before cashing.
I've paid for plenty of things with wire transfers to another person, domestically and internationally, without any complaints from my bank. Writing a check isn't always feasible depending on where they are.
Where I live, person to person wire transfers are absolutely normal. Probably because checks have never been much of a thing. I have seen like 3 in my life and all of those originated in the US.
It's incredible to me that people choose to make fun of the uselessness of crypto, when former 1st (or close to it) world countries produce stories like this about bank collapses and locked accounts / evaporated money.
Make fun of fraud or emissions or whatever if you want... but come on, there's an obvious use-case for owning your own money.
Can you elaborate how crypto solves this issue in an optimal way?
1. You can store cash, if you choose to. Way way way easier than Crypto. This should be the end of this argument but let's continue.
2. Can average citizen safely and reliably store crypto on their own anywhere nearly as easily and safely as cash? Otherwise, you're just at mercy of unregulated "exchanges" as opposed to "banks" and your power is even lower and the horror news stories even more plentiful.
3. Ultimately, crypto is a complicated technological stack that (and we will have a difference of opinions) government, if it sufficiently chooses to, can shut down and control. Crypto introduces a mind boggling chain of technical dependencies and gotchas and risks and dangers, which are super fun for us on HN to play with and argue about, but are a pit of snakes and spikes for most regular people (and just because somebody somewhere who's not technologically adept has used crypto successfully, that does not mean they were not exposed to massive risk; you can play Russian roulette and "win", it does not make it a good idea)
>1. You can store cash, if you choose to. Way way way easier than Crypto.
No.
1. Cash is bulky and if you need to store a non-trivial amount it quickly gets expensive (eg. installing safes). Crypto can be stored on a piece of paper, or in your head.
2. cash is treated unfavorably in various legal systems, from civil forfeiture (aka carrying a suspiciously large amount of cash) to outright bans on cash transactions over a certain size
3. crypto can be stored redundantly (ie. 2 of 3 multisig), cash can not.
>2. Can average citizen safely and reliably store crypto on their own anywhere nearly as easily and safely as cash?
If we compare like for like (ie. stuffing it under your mattress doesn't count), then I find the effort to train someone to use a 2 of 3 multisig software to be comparable to installing some sort of floor bolted safe.
1. You can store cash but, in most developed countries, if you try to actually use a large amount of that cash you will find that no-one will accept it or you will get repeatedly audited. The only reason to hold large amounts of cash, in the view of banks and the govt, is tax avoidance...which is usually correct.
2. It is easier, it is safer. Way easier (again, almost no places accept cash for transactions due to AML, I know a guy who used to pay for his cars with briefcases of cash, he stopped being able to do that more than a decade ago...I am in the UK).
3. I used to agree with this point but actually shutting down a P2P network is going to be very tricky in practice. If one govt in the world decides it doesn't want to do this, it won't happen. Crypto is still a terrible customer experience for regular people: fees are unclear, you can put in the wrong address and the money is gone, etc. A lot of this can happen with bank transfers too though (and does, Citi accidentally wired someone $500m in 2020, iirc, and has been unable to get it back).
I come from a traditional finance background (and studied economic history, I did my thesis on monetary policy in the 60s so I am quite familiar with the limits on purchasing gold to prop up Bretton Woods). I was initially sceptical of crypto but, imo, it is a superior technology. Not for all transactions, for example some central banks have introduced instant bank transfers, but for some. And, in some cases, it will be a superior store of value. This is already happening in the place mentioned in the OP: the reason people are taking their money out of banks is crypto, holding cash does nothing for you because inflation is nearly 200% annually, you take it out and by next month your cash is worthless, your life savings wouldn't buy a loaf of bread.
Every time I hear these arguments I just think "buy gold" (or other precious metals) and be done with it. It weighs a lot but I feel its value will never really diminish, even in a post apocalyptic setting. At some point someone will trade for rare shiny metal that has practical uses beyond just being rare and shiny (e.g. anti corrosion coatings.) Whereas government issued money might be useful as toilet paper and crypto a distant memory of failed technological promises.
In Vietnam, the largest bill is about $20, which increases the space storage requirements. Let's also remember that people need a safe place to store that cash.
> Way way way easier than Crypto.
Not true at all. Stablecoins, like USDT, are trivial to get and store in quantity.
> Can average citizen safely and reliably store crypto on their own anywhere nearly as easily and safely as cash?
App on a cell phone? Yes. I've travelled all over Vietnam and even in the most remote of remote places, people living in shacks by the side of the road, with no running water or bathrooms, they have 'smart' phones and inexpensive good coverage 4G.
> there's an obvious use-case for owning your own money.
There's also an obvious reason people don't do that. Money under the mattress - whether it's dollar bills or a hardware wallet - is vulnerable, too, and has minimal recourse when it's lost to carelessness or hostile action.
Governments seize crypto all the time. Exchanges pause withdrawals. Entire shitcoins collapse entirely. People lose their keys.
I don't know this woman's situation but the general assertion is people need their money to pay for basic goods/services
> leaving much of the population unable to pay for basic needs
I think the argument for crypto would make sense if everywhere accepted it, but I don't think it would be that useful if you need to exchange to fiat currency at volatile exchange rates to feed your family...
The range of crypto -> gift card or crypto -> virtual credit card options have improved quite a bit, and you usually get ~2% cashback for purchasing these which can help to alleviate some of the loss through fees. In the US and AU you can pay a lot of bills with crypto through sites like Bitrefill. I find that you can basically live on crypto in Australia now, but this probably wouldn't be true for people living in poor countries as Visa/MC/ and the gift card vendors don't bother with small/risky markets.
I agree with you. I'm a crypto skeptic, but even in our own (US) history, you've had bank freezes, and at one point, if you held gold in your bank, it was confiscated.
Anyone who thinks these events are permanently in the past is ignoring the lessons of history.
if there was a privacy stablecoin, like USD monero, i wouldn't hesitate to put my savings there. as long as it had a secure future and easy way to use that money for payment. unfortunately this is not possible and i don't think it ever will be.
mainly because cryptos are not really backed by anything. and anything that is backed will be so heavily regulated as to be a government cbdc. and you're back to square one. already usdc and usdt can be frozen in your wallet.
You can own your own money if you like but you can't define its value by yourself regardless of whether it is fiat paper money, bits in a bank account, or bits in a distributed ledger.
In addition governments can simply outlaw your money and then it will be worthless for important things like buying houses, cars, food, water, electricity.
People put their money in the bank to safeguard themselves from getting robbed. Yes, sometimes the banks end up being the thieves. But if people simply stashed their money under the mattress, that would be like going back to square one. Thugs would have a very easy time, taking your money, if all they have to do is convince you to reveal the key.
Readit News
A relative was going to gift me a (fairly, not huge) sum of money. The bank refused to allow them to wire transfer. As in, flat out, nope, you want to wire transfer more than say $5,000 and it is not to a corporation (e.g. mortgage, car company, etc, but to an individual) the answer is NO. This was truly eye-opening to me. This was their money. As in, hey, I worked for this money, and I would like to spend it. And... the answer is no. Of course, I understand, they can just cut a check, or make a money order, but that adds a delay, and hey, what is the bank there for? To add delays?
A very similar thing happened to my bank. I literally was going to purchase a used item, it was a few grand, I went in, said I wanted a few grand from my account. The answer was NO. Write a check or grab a money order. Hey, regardless of the situation, regardless of "perhaps this person is doing a shady cash-only deal", that money in the bank is technically MINE, right?
NO, its not my money. Its the banks money. I guess possession is really 9/10 of the law. After a few of these incidents happened and I started talking to friends, I head similar stories over and over. I find it amazing that citizens are pretty calm about this. It took a fair amount of emotional intelligence to not freak out in the lobby when the teller tells me the money I really worked for I just can not have right now.
It is irrational (and strange, countries in the EU will happily launder your money, some domestic banks still accept suitcases full of cash in the basement but the rage is all directed to US/UK banks where money laundering is almost impossible without blackmailing someone in AML...this happens, but it is fairly rare...and risky because most banks now have teams of people watching their AML staff, following them outside work, going through their emails, etc.).
The solution is simple: remove AML/KYC regulations. Let police investigate and find evidence of crimes. This isn't the job of banks, banks aren't the police, AML departments are basically run as private police departments, and the false positive rate is (unsurprisingly) through the roof. They also don't do a particularly good job with true positives either: some obscure Kazakh politician wants to open an account with $5m...okay, there is no Wikipedia page for him, he has provided proof of income, you suspect it is forged, you call the Kazakh police, they tell you it is legit...it is very hard to get right because you don't have any legal investigatory powers.
It’s not even the bank’s money but the bank’s debt to you. When you give a bank money you are accepting an IOU with pages of conditions because they lend out most of it and do not keep enough money to pay everyone back. Banks don’t want withdrawals because that limits their ability to lend and make profits off the interest etc plus capital control laws are common to prevent bank runs etc, so they erect barriers to withdrawal and can prevent it entirely. When you’re prevented from withdrawing your money that is a sign the loan you gave the bank went bad.
No sane seller is going to accept a check or MO for something of value - too high a chance for scams.
I suspect most problems like you've encountered are bank policy due to increasingly stringent anti-money-laundering regulations. But, not sure how "use a check" is helpful since nobody would every accept one.
Do PayPal or Venmo allow large transactions? That might be the best option today?
Of course you use a check. Not a personal one, but a cashier's one.
https://www.moneycontrol.com/news/trends/current-affairs-tre...
Deleted Comment
Banks have daily and monthly limits on how much cash you can withdraw, for reasons of both logistics, fraud, and crime. And it's similar with wire transfers that have a risk of fraud, because they can't be reversed.
Seriously, why couldn't your relative send you a check? And why couldn't you get a cashier's check for the used item? That's how it's always been done, for many many decades.
Yes it's your money and you can withdraw it any time via check or cashier's check. The other options like wire and cash are extra options that come with understandable limitations. But there's nothing wrong with checks.
We wanted it now and I was 1000 miles away. A wire transfer before 2PM local time would have been in the bank that day. They getting a MO or Certified check and sending it overnight now costs more money and adds a possible 24 hour delay, AND some banks do not cash cashiers checks, but put a hold on them. They CAN (IIRC) hold it for 9 (yes NINE, I have literally had this happen) days before cashing.
https://www.npr.org/2022/08/16/1117658776/lebanon-bank-hosta...
(also mentioned in OP's article, but some people don't or can't read the article)
Make fun of fraud or emissions or whatever if you want... but come on, there's an obvious use-case for owning your own money.
Can you elaborate how crypto solves this issue in an optimal way?
1. You can store cash, if you choose to. Way way way easier than Crypto. This should be the end of this argument but let's continue.
2. Can average citizen safely and reliably store crypto on their own anywhere nearly as easily and safely as cash? Otherwise, you're just at mercy of unregulated "exchanges" as opposed to "banks" and your power is even lower and the horror news stories even more plentiful.
3. Ultimately, crypto is a complicated technological stack that (and we will have a difference of opinions) government, if it sufficiently chooses to, can shut down and control. Crypto introduces a mind boggling chain of technical dependencies and gotchas and risks and dangers, which are super fun for us on HN to play with and argue about, but are a pit of snakes and spikes for most regular people (and just because somebody somewhere who's not technologically adept has used crypto successfully, that does not mean they were not exposed to massive risk; you can play Russian roulette and "win", it does not make it a good idea)
No.
1. Cash is bulky and if you need to store a non-trivial amount it quickly gets expensive (eg. installing safes). Crypto can be stored on a piece of paper, or in your head.
2. cash is treated unfavorably in various legal systems, from civil forfeiture (aka carrying a suspiciously large amount of cash) to outright bans on cash transactions over a certain size
3. crypto can be stored redundantly (ie. 2 of 3 multisig), cash can not.
>2. Can average citizen safely and reliably store crypto on their own anywhere nearly as easily and safely as cash?
If we compare like for like (ie. stuffing it under your mattress doesn't count), then I find the effort to train someone to use a 2 of 3 multisig software to be comparable to installing some sort of floor bolted safe.
2. It is easier, it is safer. Way easier (again, almost no places accept cash for transactions due to AML, I know a guy who used to pay for his cars with briefcases of cash, he stopped being able to do that more than a decade ago...I am in the UK).
3. I used to agree with this point but actually shutting down a P2P network is going to be very tricky in practice. If one govt in the world decides it doesn't want to do this, it won't happen. Crypto is still a terrible customer experience for regular people: fees are unclear, you can put in the wrong address and the money is gone, etc. A lot of this can happen with bank transfers too though (and does, Citi accidentally wired someone $500m in 2020, iirc, and has been unable to get it back).
I come from a traditional finance background (and studied economic history, I did my thesis on monetary policy in the 60s so I am quite familiar with the limits on purchasing gold to prop up Bretton Woods). I was initially sceptical of crypto but, imo, it is a superior technology. Not for all transactions, for example some central banks have introduced instant bank transfers, but for some. And, in some cases, it will be a superior store of value. This is already happening in the place mentioned in the OP: the reason people are taking their money out of banks is crypto, holding cash does nothing for you because inflation is nearly 200% annually, you take it out and by next month your cash is worthless, your life savings wouldn't buy a loaf of bread.
In Vietnam, the largest bill is about $20, which increases the space storage requirements. Let's also remember that people need a safe place to store that cash.
> Way way way easier than Crypto.
Not true at all. Stablecoins, like USDT, are trivial to get and store in quantity.
> Can average citizen safely and reliably store crypto on their own anywhere nearly as easily and safely as cash?
App on a cell phone? Yes. I've travelled all over Vietnam and even in the most remote of remote places, people living in shacks by the side of the road, with no running water or bathrooms, they have 'smart' phones and inexpensive good coverage 4G.
Inflation is big and getting bigger. In Lebanon, it's sky high.
There's also an obvious reason people don't do that. Money under the mattress - whether it's dollar bills or a hardware wallet - is vulnerable, too, and has minimal recourse when it's lost to carelessness or hostile action.
Governments seize crypto all the time. Exchanges pause withdrawals. Entire shitcoins collapse entirely. People lose their keys.
> leaving much of the population unable to pay for basic needs
I think the argument for crypto would make sense if everywhere accepted it, but I don't think it would be that useful if you need to exchange to fiat currency at volatile exchange rates to feed your family...
Definitely! But on a blockchain you don't own your money, the consensus does. The Ethereum split proved this.
do i own the house i bought? well, yes as long i keep paying property taxes.
what is ownership really and how much more/less does one own crypto vs. money in bank. is it quantity dependent? is it time sensitive?
there are no certainties in life, besides death and taxes.
Anyone who thinks these events are permanently in the past is ignoring the lessons of history.
Deleted Comment
https://saifedean.com/podcast/bitcoin-in-lebanon-with-thomas...
Article explaining the p2p money changers in Lebanon that use crypto
https://restofworld.org/2021/the-cryptocurrency-dons-of-beir...
mainly because cryptos are not really backed by anything. and anything that is backed will be so heavily regulated as to be a government cbdc. and you're back to square one. already usdc and usdt can be frozen in your wallet.
Deleted Comment
In addition governments can simply outlaw your money and then it will be worthless for important things like buying houses, cars, food, water, electricity.