Debanking: The What, How and Why of Modern-Day Money
Shoot the Bank: By SINGULART
Some years back, my husband and I decided that it would be a good idea to progressively debank ourselves in order to safeguard our financial future. It wasn't until a week ago that I realised how progressive that decision was, how it would open us up to a whole world of opportunity and how it would help uncover a truth that had been kept buried for generations.
Debanking? Wait, Don't We Need Banks?
There are probably several different views on what it means to fully debank. Realistically speaking, the modern world cannot yet do entirely without banks, however, on the individual level, we can turn the tables and have banks work for us, rather than us work for them.
In my opinion, to be debanked at this early stage of our economic evolution is to have sole custody of your wealth on the one hand, and multiple avenues for on-off ramping between the crypto and fiat worlds on the other. It means only using banks if and when there is a genuine need, rather than relying upon them to "look after" your money.
This will look different for each person, but as an example, it could mean accepting payments for your goods or services in crypto and only converting to fiat when you need to pay your taxes, or maybe you only store a small amount of money in your fiat bank account to cover your bills and automatic payments, but keep the majority of your wealth stored as crypto assets.
Benefits of Debanking
As a digital nomad, worldschooler, globetrotter, international businesswoman and Web3 enthusiast, the opportunity to debank gave me and my family more freedom than we could ever imagine. Part of it is due to the fact that our tax liabilities have (lawfully) decreased by a huge margin, meaning that our annual expenses are lower than ever before, and this is even in light of the fact that our newfound lifestyle involves a lot of international travel and all the added costs that come with that.
Additionally, with an increasing number of exchanges, crypto wallets and even private banks, providing crypto-fiat debit card services (such as Nexo, Binance, Wirex and Xapo), I am able to keep my crypto safe and secure (self-custodial!) until the time that I want to use it - day or night (including weekends). I'm able to transfer my crypto assets from cold storage to my crypto-enabled banking apps and either spend them directly via my debit card or convert them to fiat currency within the apps and withdraw cash at an ATM.
I use the banks when I need them. Not the other way around.
And, they don't get to use my money without my permission, nor do they get to block me from withdrawing it from my own account when they make a mistake.
The Truth: Central Banks are Not Your Friends
When children enter high school, they're often offered a low-rate credit card to kick-start their transition into adulthood. These youths soon learn that debt is what gives one a healthy credit score (so sensible!) and so, they begin to accrue debt. Credit scores dictate the level of lending available to an individual for schooling, businesses and home ownership, and, incidentally, all of this lending is issued in a currency that is, in itself, backed by trillions of dollars of debt.
The problem with this crooked system though is that one way or another, the creditor always comes to collect, especially in times of trouble. Fractional banking (whereby the bank holds only a portion of their deposits as backup reserves) puts banks at risk of collapse, at least up until the point that they turn the printers back on again. There's cash flow, yes, but hyperinflation follows. As do recessionary times. And global financial meltdowns.
Le sigh.
When decentralised banking operating on a public ledger was created with the birth of Bitcoin, all of a sudden we had the panacea for this systemic disease. And yet, they pooh-poohed it, practically threw up on it, criticised it, ridiculed it and finally, tried to destroy it.
Yes, if the central banking sector and the Federal Reserve fails to allow and integrate the smooth transition between fiat and crypto, it could wreak havoc on everything we've been working towards, but remember, that's only today, as things currently stand. There's plenty of upside room for development and, if they don't get on board soon, we may leave them in the dust.
Messari Founder and CEO, Ryan Selkis, puts it like this,
"Crypto didn’t change accounting rules to favor Treasuries, then cover up bank insolvency. The Feds did.”
He says decentralized finance (DeFi) is the direction the world is heading, claiming it is a more trustworthy system than the traditional financial markets.
“Crypto is a life raft and an optimistic bet on a future of open financial services + open tech. It is also a protest vote and an ‘exit’ tool. You want exposure if you can’t trust your institutions. And the message the past week has been ‘do not trust your banks or governments.’”
When Silicon Valley Bank (SVB) made a critical communications error that lead to a bank run of more than $42 Billion before it officially collapsed, the crypto industry, and more specifically Bitcoin, ticked along nicely with no drama, no failures and a warm and welcoming embrace to those about to potentially lose access to all their fiat holdings. Cathie Wood, a.k.a., Aunt Cathie, summed it up nicely in a tweet:
At the same time we were reminded that U.S. Federal Reserve Chair, Janet Yellen, had recently said that she does not believe that there will be another financial crisis for at least as long as she lives, thanks largely to reforms of the banking system since the 2007-09 crash.
I'd like to point out that Bitcoin was created as a direct response to that crash and seems to be the only thing that has provided any sort of relief or "banking reform" to date.
The central banking sector is pretending that the house isn't on fire, telling depositors that their money is "safe" and at the same time, closing down another crypto-friendly bank because "regulators wanted to send a very strong anti-crypto message,".
This purposeful distraction would almost be comical if it weren't for the fact that real people with real ambitions and great ideas were the ones suffering most, on account of the lying, cheating, defrauding and genuine carnage being caused by those at the top.
Next up on the not-your-friend list is Credit Suisse, from the gloriously "neutral" country of Switzerland.
Another central bank that is seeking bailouts from the government (read, borrowing more money to cover the shortfall, which basically means that their debt is now backed by more debt, which the taxpayer will be forced to recover), carries a tale that sounds like something out of a dystopian sci-fi movie. Check this out:
2014: Credit Suisse pleaded guilty to charges of tax fraud from the U.S. Department of Justice after admitting to helping American taxpayers file fraudulent returns and hide funds offshore.
2017: Credit Suisse agreed to pay $5.38 billion for making false and irresponsible representations about residential mortgage-backed securities.
2022: Whistleblower leak from within the bank revealed that it had repeatedly pursued, opened and maintained accounts for high-risk clients involved in torture, drug trafficking, money laundering, corruption and other serious crimes, as reported by the Guardian.
I mean, come on!!! Seriously?!
The epic and gloriously public unravelling of toxic central government policies, questionable associations and unreasonable rulings is happening so quickly, it's almost as though it was planned and, not surprisingly, the safety net that is Bitcoin - the reason for which it was created - is performing beautifully, perfectly, and as originally intended. Why?
Because the truth that has been hidden for so long is that every individual on this planet is not only capable of being 100% responsible for their own assets, but they also have a duty to be so.
Handing your personal sovereignty over to another is to do yourself and society a huge disservice.
We owe it to future generations to prevent another global financial meltdown by purposely eliminating the hand that feeds corporate greed and malfeasance. If they are starved because we won't buy into their charade, we shift the field of infinite possibility from fear, greed and abasement to strength, personal autonomy and financial abundance.
Closing Thoughts
We are at the beginning stages of the greatest dislocation of wealth that the world has ever seen. However, the crumbling of the old structures that were built on tyranny is only worthwhile if we rebuild from the grassroots level, where all of us get to vote with our feet, our voices and our finances.
I believe that what was started with Bitcoin and the decentralisation of finance will take us to untold levels of advancement. The unbanked will be no more; the corruption of centralised banking will no longer harm us; the reduction in the extremes of wealth and poverty will become evident; and the technological advancement we shall see as developers jump into the world of Web3 will unlock opportunities that we had never even dreamed of before.
It may sound like a utopian fantasy, but it's not. It's already begun and your job now is to jump on the train before it leaves the station.
