A Brutal reminder that your money isn't yours if you can't access it anytime

[Botnake]

Something like this happened in my country.. One of the major banks collapsed and declared bankruptcy due to mismanagement, and several of their major customers withdrew their money.. This forced the bank to go bankrupt, leaving thousands of people without access to their money.. Even after years of this case, and many people were arrested, customers still didn't receive adequate compensation for their losses.. Many even suffered severe stress from losing all their money.

This is a wake-up call that keeping money in a bank isn't completely safe.. No matter how much you trust a bank, it can run into problems at any time. Whereas with Bitcoin, you expect it to stay in your wallet as long as you keep it secure, and no one can freeze your funds, restrict your access, or run away with your money.. That's one of the key differences between Bitcoin and traditional banking.

People may learn the hard way, but it does not guarantee that everyone will shift to bitcoin. Because as long as the government will not promote bitcoin, people will not trust it, most especially those pro-government people. If they lose their funds on one bank, they will trust another reputable think, perhaps that's their way of response that they're not really open for bitcoin.

However, for us crypto enthusiasts, of course we should promote bitcoin. We knew bitcoin well, something that these ordinary people trusting banks do not have.

[shinratensei_]

Another day to remind everyone to be their own bank, embrace Bitcoin and take full custody of their funds.

A big reminder for those who've forgotten the main reason something like BTC exist, which is to keep us from custodial risk. Those people who favor centralized custodian always talk endlessly about the risk of self custody such as losing seed phrases and so on while in reality if you put enough time to learn you'll be safe and when it comes to central custodial, you're at the mercy of the institution who manages your money. If they ever pulled shitty move that could endanger their entire customers, you're going down with them. Can you imagine getting charged for the custody and you're still going down with them when thing went south!

[Lucius]

~snip~
Isn't it better that you're in this category than having everything trapped in the bank during this kind of moment?
This takeover left many people Bankrupt. This isn't even much of a problem since you can use DEX or even CEXs to liquidate as much quantity as you want while the remaining coins stays safely in your cold storage or HW.
What you described is a better problem, in fact a good one for that matter since liquidating bitcoin isn't that difficult and not all banks would be blocked at the same time, so you can always receive fiat in the available one.
When your funds is out of reach it becomes a real problem. Self-custody is non-negotiable.

We can call it a "better problem", but it's still a problem if you're in a situation where you can't buy anything with Bitcoin, or you can't sell it for fiat. Those who want to protect themselves in situations like this need to have a way to use their Bitcoin regardless of the collapse of the banking system in the country where they live.

In my opinion, the solution is to have a bank account in another country (if possible), or to have access to virtual/physical crypto cards like these in my signature. In that case, even if all the banks close and the money remains frozen indefinitely, I have a way around it.

[MusaMohamed]

We can call it a "better problem", but it's still a problem if you're in a situation where you can't buy anything with Bitcoin, or you can't sell it for fiat. Those who want to protect themselves in situations like this need to have a way to use their Bitcoin regardless of the collapse of the banking system in the country where they live.

In my opinion, the solution is to have a bank account in another country (if possible), or to have access to virtual/physical crypto cards like these in my signature. In that case, even if all the banks close and the money remains frozen indefinitely, I have a way around it.

Going with bitcoin and cryptocurrency is better than with banks but avoid altcoins which can be frozen like stablecoins. With banks, if they froze your bank accounts and money there, likely you will have further problems with governments like police and tax authority, not only with banks.

It's more dangerous to use bitcoin and cryptocurrencies as alternatives for fiat currency and avoid bank system if government want to tax you as much as they can. You can have ways around to use your bitcoin and cryptocurrencies but won't be free from government especially if they already froze your bank accounts. Especially in recent years, governments can play around with big data and AI can help them to do that more comfortably and efficiently.

[Faisal2202]

Another day to remind everyone to be their own bank, embrace Bitcoin and take full custody of their funds.

I am surprised that the youth trusted banks so much, but I should not be (I think), because this youth was not only investing in this bank because they were greedy to earn interest. The bank was big, and it controlled a lot of funds, and business owners always rely on banks, so they can't skip them and choose BTC over them.

And even if we choose BTC, we can't ignore banks. We have to use them at some point. BTC has not reached there yet. Banks are still leading in finance, and we can't actually live without them easily.

[Queen uloma]

Not your keys, not your coins.

It is time we all realize the disadvantage of using a centralized platform to hold our assets, it does not make any difference that you are having bitcoin and yet holding it on a centralized exchange, you can still fall in the place of those that are affected in Paraguay in this manner or any other related one.

Wish you to embrace decentralization, adopt Bitcoin, and see it as the reason why we can have our financial freedom away from the centralized authorities that have always been in charge of our money; anything that belongs to us must be in our possession, and we must be able to have control over it. This is why Bitcoin is the answer to many questions about financial challenges with centralized authorities.

You’re very correct, holding bitcoin in centralized exchange doesn’t fully give financial freedom because you still depend on another people to control your funds. The main benefit of bitcoin is freedom to hold and control your own money without depending on anyone.

We still need to have it in mind that self custody comes with responsibility, if you automatically lose your private keys or seed phrase, nobody will recover your funds. That’s why learning how to secure your bitcoin is very important as having it.

[SeriouslyGiveaway]

You’re very correct, holding bitcoin in centralized exchange doesn’t fully give financial freedom because you still depend on another people to control your funds. The main benefit of bitcoin is freedom to hold and control your own money without depending on anyone.

We still need to have it in mind that self custody comes with responsibility, if you automatically lose your private keys or seed phrase, nobody will recover your funds. That’s why learning how to secure your bitcoin is very important as having it.

Financial freedom is when you are rich and can live a very comfortable life without stressful concern about money. That means you have a lot of money, it's a first important condition, and another one is you have to keep your money safe.

Centralized exchanges in cryptocurrency industry are not safe places for your fund storage. Short term or long term storage, it's not safe to store money on CEX but if you are storing your fund there in long term, at least it's your plan, it's more risky.

Centralized exchanges are business and they can have bad management, can bankrupt, or they can be hacked and die consequently. You already don't have private key, don't own coin there but if there are other problems with these exchanges, your fund will be at higher risk of being lost.
https://www.cryptowisser.com/exchange-graveyard/

[macson]

It feels pretty stupid to put most of your money in the bank. People should understand that the banking system has its own flaws and limitations and there's no need to fully trust it. Even if they want to put money in the bank, it should only be a small portion of what they have. The rest they can diversify into Bitcoin, gold, or other stable assets.

There are plenty of examples of banks collapsing and leaving so many of their customers struggling to access their funds. If they don't learn from that, they'll only have themselves to blame for trusting a centralized system too much.

[Silikiem]

Paraguay is in chaos right now.

Paraguay's central bank has taken control of Ueno Bank following serious insolvency issues.

Approximately 2.94 million customers, around 63% of Paraguay's adult population, have lost access to their money.
https://x.com/seth_fin/status/2118109960689091021

These people have gone out to the streets demanding their money but it's beyond their reach since the banks they trusted with their money have declared bankruptcy. Banks and centralization has failed us. Self-custody remains the best.

If these people have kept some money in Bitcoin and hold in open-source non-custodial wallets, they wouldn't be bothered about the banks collapse, since thier coins would be available to them whenever they want.

Another day to remind everyone to be their own bank, embrace Bitcoin and take full custody of their funds.

Being your own bank still doesn’t mean we’re not going to be needing traditional banking systems for our day to day transactions. However in a case like this I still believe there’s some kind of safety insurance from most traditional banks deposit with government backing so it’s very unlikely that those affected by the incident in Paraguay have automatically lose all their funds. It is only wise having bitcoin for a store of value instead of entrusting it on the traditional banks but we still need them for our day to day transactions and payment of goods/services when converting bitcoin into cash.

[Cryptomultiplier]

Another day to remind everyone to be their own bank, embrace Bitcoin and take full custody of their funds.

I am surprised that the youth trusted banks so much, but I should not be (I think), because this youth was not only investing in this bank because they were greedy to earn interest. The bank was big, and it controlled a lot of funds, and business owners always rely on banks, so they can't skip them and choose BTC over them.

And even if we choose BTC, we can't ignore banks. We have to use them at some point. BTC has not reached there yet. Banks are still leading in finance, and we can't actually live without them easily.

We can't really do without the banks even if we know they can fail at anytime as we read here. If the banks are no longer trusted and safe and no one patronize them, then there would be an almost collapse of the financial system in many countries, because BTC offers an alternative to the traditional financial system not a replacement for it.
Besides the number of individuals who still lack crypto currency knowledge is still small as compared to those who are unbanked or even have bank accounts, so it's still a long way to go for Bitcoin and crypto currencies adoption before we even talk about self custody as the main precedent of financial safety and security.

[ColdLava40]

government backing so it’s very unlikely that those affected by the incident in Paraguay have automatically lose all their funds. It is only wise having bitcoin for a store of value instead of entrusting it on the traditional banks but we still need them for our day to day transactions and payment of goods/services when converting bitcoin into cash.

Crypto will not be able to completely take out the traditional banking system. It is only going to remain as secondary financial system.

We still need the banks, even with all their doings that do not favor anyone more than them themselves. The best solution is to diversify your portfolio.

You don't want to always touch into your bitcoin investments, so you should have little money left in the bank for your regular needs and activities.

Banks can't be trusted, so you shouldn't leave a reasonable amount of money in the bank make your self custody your priority.

[Davidvictorson]

Paraguay is in chaos right now.

Paraguay's central bank has taken control of Ueno Bank following serious insolvency issues.

Approximately 2.94 million customers, around 63% of Paraguay's adult population, have lost access to their money.
https://x.com/seth_fin/status/2118109960689091021

These people have gone out to the streets demanding their money but it's beyond their reach since the banks they trusted with their money have declared bankruptcy. Banks and centralization has failed us. Self-custody remains the best.

If these people have kept some money in Bitcoin and hold in open-source non-custodial wallets, they wouldn't be bothered about the banks collapse, since thier coins would be available to them whenever they want.

Another day to remind everyone to be their own bank, embrace Bitcoin and take full custody of their funds.

In as much as we want to push the idea of self-custody, banks will still remain very crucial in the finance world and even in our personal lives.
Insolvency is one of the issues in the banking world and it is normal for central banks to try to take control when there is no other solutions.
Yes, self-custody is important as well as the banks. Two truths can exist.

[serjent05]

Paraguay is in chaos right now.

Paraguay's central bank has taken control of Ueno Bank following serious insolvency issues.

Approximately 2.94 million customers, around 63% of Paraguay's adult population, have lost access to their money.
https://x.com/seth_fin/status/2118109960689091021

These people have gone out to the streets demanding their money but it's beyond their reach since the banks they trusted with their money have declared bankruptcy. Banks and centralization has failed us. Self-custody remains the best.

This is why we should only deposit the amount that is covered by insurance.  I won't risk my money for a meager yearly interest.  This is also the problem of people trusting banks too much.  Depositing more than the insurance promised is like playing with fire.  It can easily burn us if bad things  happen just like the situation @OP stated.

If these people have kept some money in Bitcoin and hold in open-source non-custodial wallets, they wouldn't be bothered about the banks collapse, since thier coins would be available to them whenever they want.

Or if they just keep it by themselves, the should not be affected by the bankruptcy.  And of course investing the money in Bitcoin and keeping them in a non-custodial wallet can give them a good profit in the long run.

[philipma1957]

In my country if any bank go insolvent, the central bank will compensate the bank users by paying them their money if the bank is legally registered with the central bank but the issue is that there will be a delay before paying the customers.

There are limits to the compensation in every country, US, EU , whatever, same in this case, there is no country on this planet that has unlimited deposit guarantees, in your case is $1,300 so about 30 times less than what Paraguayans will receive

Each depositor is guaranteed up to 228 million Paraguayan guaraníes, or about $38,000, from a central bank fund, the regulator said. Under Paraguay’s banking law, that money must be paid within 15 days, a deadline that can be extended once by another 15.
About 97% of Ueno’s depositors have balances fully covered by the guarantee, according to preliminary estimates cited by central bank board member Marco Aurelio González. For amounts above that limit, the central bank stopped short of promising full repayment, saying only that it would seek “the greatest possible protection.

The whole world is in chaos and turmoils during this AI era that has changed the world entirely and in a negative way for security on many platforms.

Weird, everything is peaceful here, maybe because I'm not all covered in tinfoil?

why did he think ai killed the bank?  I cannot find anything that says that.

[Questat]

Another day to remind everyone to be their own bank, embrace Bitcoin and take full custody of their funds.

A big reminder for those who've forgotten the main reason something like BTC exist, which is to keep us from custodial risk. Those people who favor centralized custodian always talk endlessly about the risk of self custody such as losing seed phrases and so on while in reality if you put enough time to learn you'll be safe and when it comes to central custodial, you're at the mercy of the institution who manages your money. If they ever pulled shitty move that could endanger their entire customers, you're going down with them. Can you imagine getting charged for the custody and you're still going down with them when thing went south!

Maybe these people are not really being rational, otherwise they could have shifted into bitcoin already and just focus on accumulating bitcoin and be their own bank, rather than putting more fiat in their account and let it sleep in the bank, and only to find out everything they hardly earned are no longer accessible.

Bitcoin is for the people, that's why its decentralized nature matters the most. But majority are still trusting centralized banks, and ignore about self-custody, when its our own money so we should have the full control on it, and not the banks having its full custody.

[pooya87]

The worst part is that what we are seeing in places like Paraguay is just the beginning. With the way the US regime destabilizing the world we are going to witness a lot of similar side effects of that strategy in various parts of the world. The regime wants to zero out its rapidly increasing debt ($40.5+ trillion so far).

And the problem is that there is no escaping that, we can only alleviate the pain by adopting bitcoin since bitcoin is not affected by such things but we are still part of the same society and same financial system that works only with fiat and through the banking system. So we will be affected one way or another.

The only silver lining is that currently bitcoin is being sold at a discount since it is undervalued (lower than its intrinsic value) and when such incidents happen and remind people the importance of bitcoin, they'll have a good entry point

[cryptoaddictchie]

If these people have kept some money in Bitcoin and hold in open-source non-custodial wallets, they wouldn't be bothered about the banks collapse, since thier coins would be available to them whenever they want.

Another day to remind everyone to be their own bank, embrace Bitcoin and take full custody of their funds.

Self custody is good but self protection is also a responsibility attached to that. Its not safe that you only knew how to do self custody cause thats only one part of being a custodian. Doing so, there will be a lot of dangerous ground that might end up being hack or scam when you dont know how to protect yourself from dozens of scammers, phising site and more hackable activity by scammers.

No one will refund you the money once its got compromised like Binance did.

[Outhue]

Paraguay is in chaos right now.

Paraguay's central bank has taken control of Ueno Bank following serious insolvency issues.

Approximately 2.94 million customers, around 63% of Paraguay's adult population, have lost access to their money.
https://x.com/seth_fin/status/2118109960689091021

These people have gone out to the streets demanding their money but it's beyond their reach since the banks they trusted with their money have declared bankruptcy. Banks and centralization has failed us. Self-custody remains the best.

If these people have kept some money in Bitcoin and hold in open-source non-custodial wallets, they wouldn't be bothered about the banks collapse, since thier coins would be available to them whenever they want.

Another day to remind everyone to be their own bank, embrace Bitcoin and take full custody of their funds.

This will put some sense into the brain of people who thinks they are in safe hands with the banks, I called a friend who thinks that keeping money in the bank is the best thing, sent him the link of this Paraguay's news and he didn't reply me, I am sure he wasn't expecting this to happen but it has happened few times before, just that it's not something that happens all the time but still very possible, I am not saying anyone should leave the banks behind but don't keep all your life savings in one, maybe split between banks if using banks is the only thing you know how to do, my own Bitcoin wallet is more of a bank to me and it's my duty to watch it like an hawk, my way isn't for everybody because if you lost your key no one will refund you, if I lost my key I will lose my life savings.

[Don Pedro Dinero]

This is why we should only deposit the amount that is covered by insurance.  I won't risk my money for a meager yearly interest.  This is also the problem of people trusting banks too much.  Depositing more than the insurance promised is like playing with fire.  It can easily burn us if bad things  happen just like the situation @OP stated.

Well, that isn’t usually a problem for most people. In my country, the Deposit Guarantee Scheme covers up to €100,000 per depositor and bank, so potentially only the very wealthy would face problems, because ordinary people don’t usually have $111,000 in the bank. The problem is that this is nothing more than a promise. If the big banks were to go bust, there wouldn’t be enough money to pay depositors, although there would always be the option of printing money via the ECB in the form of a bailout, which would cause even more inflation. Ultimately, this is a house of cards that is kept afloat by creating more and more money.

[davis196]

Paraguay is in chaos right now.

Paraguay's central bank has taken control of Ueno Bank following serious insolvency issues.

Approximately 2.94 million customers, around 63% of Paraguay's adult population, have lost access to their money.
https://x.com/seth_fin/status/2118109960689091021

These people have gone out to the streets demanding their money but it's beyond their reach since the banks they trusted with their money have declared bankruptcy. Banks and centralization has failed us. Self-custody remains the best.

If these people have kept some money in Bitcoin and hold in open-source non-custodial wallets, they wouldn't be bothered about the banks collapse, since thier coins would be available to them whenever they want.

Another day to remind everyone to be their own bank, embrace Bitcoin and take full custody of their funds.

There have been multiple brutal reminders about the dangers of relying on a third party with your own money. It doesn't matter if we are talking about crypto exchanges or banks. I hope that the situation in Paraguay gets back to normal and the central bank helps in stabilizing the insolvency issues of this Ueno bank. My country had a major problem with banks going bankrupt 30 years ago. Back then, the central bank decided to simply print more money and save the insolvent banks, but the result was hyperinflation. I really hope that there won't be any hyperinflation happening in Paraguay.