- As banks begin to restrict how customers can withdraw their cash, Bitcoin provides the solution for sovereign money
Keeping cash in the bank is branded as the safest way to store money, but banks across the globe are persistently increasing limits and roadblocks for cash withdrawals, in what seems to be an effort to forcibly prevent customers from withdrawing their money. With each passing year, this is becoming a more serious issue, and this is one of the primary reasons why the world needs Bitcoin.
In recent news, China is getting some heat for tightening cash withdrawal limits, with individual withdrawals of USD 14,000-42,000 needing to be approved before they are dispensed, with the limit for businesses being USD 70,000. This does not mean that withdrawals larger than that will always be denied, but it does mean that any withdrawals at or above these limits will be closely scrutinized, delayed, and potentially rejected.
This is actually nothing new, China has been tightening cash withdrawal limits for years. The tightest limits are on anyone holding USD in Chinese bank accounts, with any withdrawals over USD 3,000 being closely scrutinized. Also, strict limits are placed on Chinese citizens who try to withdraw money overseas.
Overall, it seems the withdrawal restrictions in China are both meant to increase the amount of liquidity in banks, i.e. ensure that banks have plenty of cash by holding onto customer’s cash, in addition to preventing anyone from sending their money overseas. Also, the restrictions are targeted at weakening the dominance of the USD.
All of this being said, China is not alone when it comes to withdrawal restrictions. For decades the United States has had a limit of USD 10,000, above which withdraws or deposits need to be reported to government agencies and are closely scrutinized.
The issue that has really been increasing in the United States lately is that withdrawal limits are extremely low. Perhaps the best bank accounts allow cash withdraws at ATMs of USD 1,000 per day, but many banks only offer ATM withdraws of USD 300 per day. Even if someone is earning a relatively normal income in the United States, or even below normal, it is common to not be able to withdraw all of their income from the ATM, and the cash will slowly accumulate in the bank.
Shockingly, similar restrictions have been placed on debit cards, with spend limits of USD 1,000-3,000 per day. So even if someone has USD 1 million in the bank they cannot buy a car with their debit card.
The part where this gets scary is that bank accounts are frozen and seized in the United States for all sorts of past debts, and bank customers are almost entirely powerless to stop these seizures. Further, banks sometimes freeze and close accounts for no reason, and under law, banks can close an account and hold up the money for many months without any reason.
Essentially, banks in the United States, as well as in China and probably the whole rest of the world, have tight withdrawal restrictions to ensure that the bank has plenty of cash. Along the way, this leads to people losing their money due to the government and creditors draining accounts.
To put it simply, bank customers have no power over their money, and the bank, as well as the government, can place whatever restrictions they want on a bank customer’s funds, and the long term trend is that it’s getting harder and harder to get money out of the bank.
This is why the world needs Bitcoin. With Bitcoin, someone can have USD 1 million, or even USD 1 billion, and they have full access to those funds with zero withdraw limits. Further, Bitcoin cannot be seized or frozen for any reason, since the owner of a Bitcoin wallet is the only one who has access.
Ultimately, Bitcoin is becoming a far more desirable way to save money due to the worsening restrictions at banks, and it is likely that long term people worldwide will increasingly use Bitcoin instead of banks for saving money.
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