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The Ugly Side of Traditional Banking

Last week the world saw the ugly part of traditional banking, with Turkey suddenly freezing millions of accounts and Hong Kong ATMs being out of cash. Incidents like these encourage people from all social strata to consider safer stores of value (SOVs), with Bitcoin being the first reasonable option.

Turkey Freezes More Than 3M Bank Accounts

On Thursday, local media outlet Sözcü Gazetesi reported that hundreds of thousands of Turkish citizens received an electronic foreclosure notice informing them that their bank accounts are frozen on Monday.

Citing local tax expert Nedim Türkmen, the media portal said that about 2.5 million taxpayers and 800 thousand companies that haven’t been able to pay their debts saw the notices. In total, about 3.3 million banking accounts were frozen, and the total debts of all entities amount to the equivalent of $26 billion.

Turkey’s decision was surprising as debtors expected government help with repayments. In fact, Treasury and Finance Minister Berat Albayrak promised such an aid. On Monday, Albayrak announced the New Economic Policy, but it didn’t hint to such debt restructuring.

Hong Kong ATMs Out of Cash

Earlier today, we reported that local ATMs started to run out during the weekend. Social media users posted pictures and videos of long queues of people hurrying to draw money out.

But the situation might get even worse, as Hong Kong citizens are concerned about bank account freezing by the government. As per Kyle Bass, CIO at Hayman Capital Management, such a scenario is realistic:

In September, the number of searches for the Bitcoin term hit the highest levels since June in Hong Kong, according to Google Trends data.

On a side note, ATMs are not a problem of Hong Kong only, as 10% of them are not functional.

Indian PMC Bank Freezes Accounts

In India, the Punjab Mumbai Cooperative (PMC) bank is in the midst of a fraud scandal. The bank is charged with providing a huge loan to the bankrupt realtor Housing Development and Infrastructure Limited (HDIL), moving 70% of its total credit facilities to HDIL.

As the investigation goes on, the Reserve Bank of India (RBI) imposed a six-month restriction on PMC. Thus, the latter cannot provide loans, accept deposits or invest. What’s worse, customers can withdraw only up to 1,000 rupees (about $14) from their accounts.

The public confidence in banks used to recover after the financial crisis in 2008, but the chances are the trust will erode, which makes a strong case for Bitcoin.

How do you think the banking sector will look like in 10 years from now? Share your thoughts in the comments section!

Image via Shutterstock, Twitter @Jkylebass

The Ugly Side of Traditional Banking

I am a believer of the HODL philosophy because we are still in the nascent stage of blockchain technology. Although we are in a bear market now, my outlook on the adoption and growth of blockchain solutions remains unchanged. Blockchain transactions has been growing exponentially and demand for cryptocurrency like Bitcoin [BTC], Ethereum [ETH], Ripple [XRP], Litecoin [LTC] and other Altcoins will only continue to grow exponentially in the next five to ten years.

3 Replies to “The Ugly Side of Traditional Banking

  1. International banking is part of a better than 100 year old system of Corporate Fascism. It has always been controlled to a limit ,until recent years. With the advent of an American Corporate Fascist Administration, many countries around the world have joined this opportunity for themselves to literally be on the far right side of the International banking controlled network of money. Since some form of capitalism flourishes under this type of political rule,economies have the appearance of being healthy,but in reality are just the opposite. Bitcoin was a “cry in the wilderness”,that itself is likely to be part of an International banking immersion of anything that threatens the network.

  2. Crypto Currencies have initiated a Macro Fork . Either the people of the World , (mainly out of fear of the unknown) hold onto Centralized control of money or they move towards a Decentralized liberation of money and themselves. Which is more dangerous ? I guess it all depends on your station in life ?
    One thing is for sure , Central Banks ,.. due to their Corporate Fascist roots have missed a once in a lifetime opportunity to literally change the lives of the people of the world for the better . By initiating a “Full Reserve” Banking System and allowing Cryptocurrencies to meld into a system that is truly representative of value,through work ,not obtuse laws,real prosperity could be achieved, including from hidden areas of the planet . As it stands , if “Stablecoins” become the next digital phenomenon , the Corporate Fascists win ,…again. The purpose of Cryptocurrency has always been to correct or liberate the money system, not destroy it.

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