Russian Bank “My Bank” freezes cash withdrawals day after Russian Central Bank warns on Bitcoin

By
Gordon Hall
January 28, 2014

According to a report on Zero Hedge, “My Bank,” one of Russia’s top 2oo lenders by assets, has suspended all cash withdrawals. The lockdown is expected to last for a week.

This news follows the recent statement by the Russian Central Bank warning citizens against the speculative and legal risks of Bitcoin.

The Russian Ruble is experiencing downward pressure from the current “risk-off” environment afflicting emerging market economies. It’s possible this currency situation is responsible for the bank freeze.

My Bank shuts down cash withdrawls to prevent a bank run?

This story, together with the looming problems in the Chinese shadow-banking sector as well as HSBC’s recent bottlenecking of withdrawals and Lloyd’s ATM-withdrawal “glitch,” are all raising red flags regarding liquidity flows in the fiat financial system.

The IMF has threatened 10% wealth taxes and the German Central Bank recently proposed “one-time” levies on struggling Euro members. Even Canada’s Central Bank has proposed a bail-in regime. Cyprus is seemingly to be the template for future “resolutions” of Europe’s banking crisis. Even Canada’s

The global economic outlook has begun to sour in 2014 as the wild money printing experiments of central banks reach their limits. With the real economy sluggish and all efforts at meaningful structural reform blocked by the very financial agencies central to the problem, the seizure of private wealth is likely to be the system’s last resort.

Alternative forms of wealth like Bitcoin and precious metals, which offer people protection against wealth confiscation, are increasingly frowned upon by desperate governments.

While fiat cash remains a necessary evil for the majority of transactions, bank saving accounts represent an inflation-underperforming and increasingly exposed store of value. Very few bank depositors realise that, under current financial laws across many nations, their deposts are viewed as unsecured loans made to financial companies. As global stock markets appear toppy and bonds, the traditional “safe harbour” investment, bleed credibility due to government debt expanding beyond the mathematical possibility of repayment, good investment opportunities are  scarce.

While it remains to be seen how Bitcoin price will fare in such an environment, it’s doing well so far despite negative news. Any further banking fiascos are likely to bring a fresh influx of Bitcoin entrants.

Last modified (UTC): January 28, 2014 18:26

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