The Egyptian Central Bank published a message on Sunday (March 29, 2020) in which it admits that it has just instructed the country’s subordinate banks to reduce daily withdrawals and deposits of Egyptian 10,000 pounds (approx. USD 636.94) for individuals and 50,000 Egyptian pounds for businesses. Officially, everything is related to “concerns about the spread of coronavirus.”
Is the Egyptian Central Bank paving the way for other banks?
The Egyptian Central Bank has decided to limit daily withdrawals from ATMs and deposits to 5000 Egyptian pounds (approx. USD 318.41).
Despite appearances, this is very disturbing information. Remember that cash guarantees you full freedom and gives you control over your savings. When these are in digital form on your account, anything can theoretically happen to them. In a crisis situation, the bank may e.g. take them over.
Tarek Amer, governor of the Egyptian Central bank said on Sunday that 30 billion Egyptian pounds ($ 1.9 billion US dollars) have been withdrawn from the banks in Egypt only in the last 3 weeks.
“We found that individuals are withdrawing money from the banks although they did not need it … they withdrew 30 billion pounds in the past three weeks. We want some discipline. We live in a society and we have to think of others,” Amer said.
Limits on bank operations have been placed also in Lebanon where the country is facing protests against corruption. We talked before that people are not being allowed to get their money out of banks. Limits have also been placed on transfers outside the country. They have gone so far to force people to withdraw their USD in the countries local currency with a rate, 40% lower than the rate on the open market.
Stage 2: Digitization of Fiat money?
Note that already many stores around the world do not want to accept cash or encourage customers to pay with cards. The official reason is the fear of coronavirus.
This probably makes sense, but at the same time, the issue of issuing digital currencies of central banks appeared in the public debate. In China, e-yuan is expected to be released later this year (despite the fact that the epidemic has slowed down work associated with it). In addition, the US has recently begun the debate on the digitized version of the dollar. There were even suggestions that this one would be based on the Ethereum blockchain.
J. Christopher Giancarlo, former chairman of the Commodities and Futures Trading Commission (CFTC), in an interview with Cointelegraph, suggested that this uprising would occur, but not as quickly as many are counting:
“The United States has to proceed thoughtfully, intelligently, deliberately. We advocate pilot programs as a way to explore the utilization of the digital dollar and how it can be used, including how it can be used in a crisis. But I think one needs to be very cautious about trying to launch something as big as this amidst a crisis.”
It is not clear what technology will be behind the e-dollar.
It is possible, however, that the current crisis will be used by governments to dramatically change financial systems around the world. What will happen with cryptocurrencies after that? Currently, it is difficult to answer this question clearly.
But one thing is sure if we become a cashless society our privacy will be gone and we will turn into a surveillance society, where those in power may become more authoritarian or even dictators. We talked about the cashless society risks and how bitcoin resolves this in this article: Bitcoin Is Indispensable in a “Surveillance” Cashless Society
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