Trouble is brewing in the financial ecosystem in every part of the world, and chinks in the armor are becoming more apparent every day. One of the countries often overlooked during the turmoil in Asia and the crashing oil prices is Italy, even though this country’s banking crisis is spelling disaster for the entire Eurasian region. Bitcoin users might want to rethink their strategy of converting to fiat currency unless they have no other choice that is.
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Italian Banking Crisis To Cause Bank Run
Bitcoin users who have been keeping an eye on the financial news over the past few months may remember how the European Union created a new mandate regarding bail-ins. As a result of this mandate, bail-ins must be absorbed by bank shareholders and debt holders, before taxpayer money can be used to help cover the rest of the costs. Any deposit worth EUR 100,000 or more are at risk of not being covered by European deposit guarantees, however.
As one would come to expect, several countries have embraced this mandate, although there are still some questions that will need to be answered. For example, who is responsible for the deposits protected under European laws? Should this sole responsibility belong to the bank dealing with these deposits in question, or is it something the European Union should worry about? No one has come up with a valid answer right now, leading to a lot of distress.
Up until this point, keeping money stored in a bank account was not subject to any risk for the consumer whatsoever. However, if the banks are unable to guarantee the safety of the funds deposited into a bank account, there is no reason to use this archaic system. As we have seen during the Greece debacle, banks can even limit the amount of funds consumers can withdraw on a daily basis.
Needless to say, this entire financial ecosystem is on the brink of collapsing, and consumers would be wise to get their funds out of banks as soon as possible. At the same time, the problem arises as to where this money should go. Investments and stock markets are more volatile than the average volcano right now, and obtaining gold bars requires going to the bank once again.
Bitcoin is The Viable Option
When traditional investment options, such as stock markets, precious metals, and even government bonds are out of the question, there are very few options left to consumers. At the same time, this creates an interested scenario where consumers will learn what it is like to be responsible for their funds again.
Bitcoin has been doing the same for multiple years. The popular digital currency puts the end user in full control of their finances at all times, regardless of whether or not consumers have access to existing financial services. It was only a matter of time until more people saw the value of the concept, and they might be forced to embrace it shortly.
Source: Business Insider
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