Why are people seeking
Alternatives to digital banking accounts?
Why are people seeking alternatives to digital banking accounts? I think this can be broken down to several factors.
1 - 2008. We saw individuals suffer through job loss and hardship, while big banks, companies, and individuals working at big banks did not. This left people with a bad feeling and lack of trust in banking and government.
2 - The technical fact that the money in your account is not yours. You have a balance, but events outside of your control can result in balance shortages. This was reinforced by SVB crash, which could easily happen at any bank if depositors were convinced to move money through social engineering.
3 - Cash is useful, but rules making its use less frictionless keep getting introduced (for government revenue and crime purposes). Cash is the only alternative from a traditional banking product offering standpoint to storing money in a digital account. However noble the reason, the introduction of these rules feels like an attempt to limit the use of cash.
4 - Cyber and technology risk is high for all online banking services. I’ve heard of high net worth people having large sums of money wired out w/out a clue how it happened. gummo has warned that everyone’s information is out there, and it’s just a matter of timing for most. Having cash or other physical assets makes some people feel safe for instances of severe weather, telecomm outages, or cybercrime.
Small anecdote - wifi went out for the payments network at my local grocery store and the only backup plan was cash (and they had one atm hardlined to the internet). I was imagining the chaos if this happened on even a city/county level.
Solutions.
One solution could be banking/govt native digital self custody offerings for certain amounts of digital cash (which could be regulated as well).
Intranets for banking, hospitals, and electric power which are sealed off from the wider internet could provide redundancy for core infrastructure and protection from malicious actors.