Spain’s second-largest bank, BBVA, has aggressively frozen up to 5,000 accounts without warning.
Many of the accounts belonged to Chinese clients, leading to cries of racism. The bank, however, claims it was acting on Spanish anti-money laundering rules.
It’s yet another reminder that traditional banking institutions have the power to shut down and block access to your money without notice.
This is why bitcoin matters. If stored independently, bitcoin cannot be frozen, shut down, or censored by any central institution or government. As Satoshi Nakamoto envisioned, it’s a payment system that can be used “without going through a financial institution.”
Banks are the past. Bitcoin is the future.
It comes only a few weeks after a blackout at Wells Fargo locked people out of their online bank accounts. Repeated failures at banking institutions will inevitably drive people to an alternative monetary system.
Not only has BBVA blocked its customers’ accounts, it has also been accused of discrimination. Chinese customers affected by the shut-down gathered outside BBVA in Madrid to protest. They carried signs that said “Stop banking racism” and “racist BBVA.”
A Chinese accountant living in Spain, Yunajie Chen, was one of those blocked out of his account. Speaking to Reuters, he said:
“We gathered here to demand equality because we are ordinary citizens. I work in a consultancy office and I don’t have suspicious transactions.”
The bank apologized, but denied accusations of discrimination:
“We are deeply sorry for any inconvenience caused by our decision to block certain customers’ bank accounts over the last few days. We are sensitive to these circumstances and we have rolled out the measures required to mitigate these impacts. For BBVA and for everyone that works at the bank, customers are at the heart of our activity, and we absolutely and unequivocally reject any form of unjustified discrimination.”
The accounts in question remain frozen at the time of writing.
This is yet another reason why bitcoin is the future. It does not discriminate. It doesn’t reject people because of their race or nationality. Bitcoin is a universal monetary system open to anyone on the planet.
Similar cases have happened before. The most famous example took place in Cyprus in 2013. In the wake of a financial crisis, the country confiscated 40% of all depositor funds above €100,000.
If you had a large amount of money in the bank, it was snatched. Just like that.
The event in Cyprus is widely cited as a trigger for the bitcoin price run that followed in 2013. With so many people affected by the Cyprus bail-in, many turned to bitcoin as an alternative.
The US, Canada, the UK, and Germany have all passed laws allowing banks to seize customer funds in the event of another financial crisis. This could happen to any of us, at any time.
Consider this a reminder that your bank has complete control over your money. You are trusting them implicitly. If your bank decides to confiscate your funds or block access to your account, there is little you can do to fight back.
Bitcoin offers an alternative. So long as you store it independently, in a privately-held wallet, it cannot be frozen or confiscated by a third-party.
The traditional banking system is slowly losing trust. It’s only a matter of time before mainstream depositors look for an alternative: bitcoin.
Last modified: May 20, 2020 12:41 PM UTC