Banking Havens Are Obsolete
The Financial Times reported Tuesday that Switzerland has agreed to share the identities of foreign owners of Swiss bank accounts with their home countries.
This move reverses centuries of Swiss commitment to banking privacy. Switzerland, long one of the world’s financial capitals, traditionally protected all bank account holders’ privacy and anonymity. We’ve all grown up with a particular idea of what it means to have a Swiss bank account.
That idea, and those ideals, are obsolete.
Forty-seven nations, including Switzerland and Singapore, have agreed to a bank-data sharing pact in an effort to “crack down on tax evasion.”
At its core, this agreement exposes one big flaw in the idea of offshore tax havens: Trust. The account holder must trust the governments in which he/she has bank accounts to not disclose that information to, say, an American government that taxes expats on their overseas incomes and aggressively pursues those who don’t pay up.
Fortunately, Satoshi Nakamoto found a workaround for the need for trust back in 2008. Bitcoin, and any other cryptocurrency by its nature is nation-agnostic. This means you don’t need to rely on a banker in Singapore or Geneva to protect your financial privacy — that power and responsibility are solely in your hands.
This agreement, it should be noted, has not yet been implemented in Switzerland. As a representative from Swiss Coin Exchange told us, there is not yet a legal basis for the agreement.
“The parliament has to make a proposal for such a law first, and we will probably have a national referendum, so the nation has to vote on this,” the representative said.
We reached out to a number of cryptocurrency experts to get their thoughts on this data-sharing agreement and what it means for cryptocurrency economies.
In the current paradigm, where identity is established by verifying government-issued documents, and where privacy is perceived as a guise for bad actors, this seems like a natural outcome. This will be thought of as a win by the law enforcement community but as a loss of a fundamental human right by others.
– Juan Llanos
One of the prime reasons that led Satoshi to create Bitcoin was the increasing loss of financial privacy. This news is just an additional example of how individuals' right to privacy, in this sense financially, is being crushed by governments around the world. Mainly through the actions of the United States' government, other jurisdictions are simply giving in to the constant pressure to hand over their clients' data.
In the end, Bitcoin will turn out to be the only means possible for financial privacy that honest individuals can rely on. I think this is a pretty clear trend. No more financial privacy allowed for in legacy banks means individuals will have to look somewhere else. Bitcoin stands as a great option.
– Fernando Ulrich
This is just the latest in a long series of actions throughout the world to destroy any level of banking privacy. The Foreign Accounts Tax Compliance Act (FATCA) in the US will be coming into effect on July 1, 2014 and is the most egregious assault on banking privacy to date. The governments of the world are collapsing and intend to take every last dollar of their citizens’ money, and to do that they first need to know where those dollars are. This is another step down that path. For this reason, Bitcoin has never been more important as a way to salvage some of your wealth from the extortion of criminal government enterprises worldwide.
– Jeff Berwick