In a new twist, the US Federal Deposit Insurance Corporation (FDIC) is urging people not to withdraw their money from banks.
Informing them that keeping large sums of money at home is risky, they recommend citizens to bank with an FDIC-insured financial institution where their money will be “safe and sound”.
The FDIC is a government agency that protects consumers and the US financial system. Their insurance limit is $250,000 for retail accounts.
FDIC: Keep your money in Insured Banks
This is when central banks across the board have announced a new wave of infinite quantitative easing and interest rate cuts.
“Forget the mattress! Keeping large sums of cash at home is risky. The best place to protect your money is in an FDIC-insured bank where it’s safe and sound.”
Forget the mattress! Keeping large sums of cash at home is risky. The best place to protect your money is in an FDIC-insured bank where it’s safe and sound. Learn how the FDIC safeguards your #money at https://t.co/O2cb1bTUJs pic.twitter.com/R8pFVxBPrM
— FDIC Gov (@FDICgov) March 24, 2020
In this scenario and in a move and even mitigate the effects of an impending global crisis, the Federal Reserve (FED), for instance, will buy bonds from distressed corporations and municipals to build liquidity which was rapidly drying up as the USD strengthened.
Strong Case for Bitcoin and Crypto
This announcement builds a strong case for Bitcoin and cryptocurrency whose systems are controlled by pure math and cryptography.
Bitcoin is the most valuable coin, and it’s a protocol that is proving reliable as banks deliberately weaken their currencies to save the economy.
The Bitcoin protocol is self-regulating. Its system comprise miners and owners of the coin can at their volition withdraw, deposit, and even sell their holdings.
With a liquid market made up of exchanges distributed across the globe, traders, in case of a hack, have insurance akin to the FDIC where there is compensation for loss. Leading exchanges with an insurance policy to shield against losses include Binance and Coinbase.
Aside from insurance, Bitcoin holders are their own banks. By controlling their private keys, they are at a liberty to do whatever they want.
They can hold or trade and enjoy capital gains, or even borrow funds with the coin as collateral through platforms such as Nexo or even Kava.
They can also swap for other coins as Ethereum, convert to stable coins and earn interest when they lend.
#BTC is up 20% today outperforming the traditional markets for the first time since the crash last week!
— Nexo (@NexoFinance) March 19, 2020
Reaction from the Crypto Community
The decision by the FDIC to calm retail clients has received support from some quarters.
A Redditor said:
“Generally true. But really, she is right about keeping your dollars there. If you’re going to hold dollars (an error) that’s where you should hold them. Back when they were less willing to print infinite dollars, there was a risk the bank would not have them. But now that they’ll print however many they need, it’s pretty easy for the bank to guarantee they’ll have yours; they’ll just print it. So if you’re all in on dollars, banks are fine.”
Others, however, weren’t convinced:
“It’s like being in a movie theater and a security guard runs in and yells, “Remain Calm, All Is Well” and then runs back out without another word.”
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.