Russian banks want to write off funds from dormant accounts. How will cryptocurrency respond?

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Absolut Bank is preparing a document, if approved, banks will be able to get the right to write off money from "sleeping accounts...

Absolut Bank is preparing a document, if approved, banks will be able to get the right to write off money from "sleeping accounts". We are talking about the withdrawal of commissions and credit payments from the balances of clients, information about which could not be updated, provided that they did not get in touch. The initiative was supported by UniCredit Bank, RSHB and Rosbank, RBC Crypto reports .
“I think that once again we see information noise, slightly taken out of context. I doubt that such an initiative on the part of the banks was shown just like that, for sure the numbers indicate a problem, and they offered one of the solutions, albeit partly radical. It seems to me that there is no talk about touching upon the inviolability of capital. It is rather a technical aspect of the relationship between banks and clients, ”suggested Alexei Markov, lead trader at United traders.
Mistrust in banks has become one of the reasons for the emergence of cryptocurrency. The clients of the companies trust them with their savings. In the case of bitcoin, everything is different. It is a decentralized system in which no one has control over users' funds. In other words, the capital of the coin holders is completely at their disposal. This is one of the advantages of digital assets over the traditional financial system. There are others.

Bank or cryptocurrency

The society is going through the process of digitalization. People are gradually starting to give preference to digital assets. Reasons for this: the independence and privacy that cryptocurrency can provide. Therefore, due to other factors, the growth of the popularity of Bitcoin and the blockchain technology itself is inevitable, the former world chess champion Garry Kasparov is sure.
Although at the moment, cryptocurrency is not so common. Moscow Digital School expert Efim Kazantsev explains that keeping funds in banks is easier and more familiar. Possible risks of such storage and its legal consequences are well known, and in this regard, the news about the initiative of Absolut Bank does not change much. Funds in accounts are already under the constant threat of blocking and write-offs from banks and bailiffs for many possible reasons.
“In this respect, cryptocurrency is certainly safer. Neither bailiffs nor banks have yet learned how to block crypto wallets and write off cryptocurrencies without acceptance. But there is also a downside to the coin - it is much more difficult to defend your rights to cryptocurrency in court than to protect your rights to a bank account. Until now, a law on digital currency has not been adopted, and judicial practice is controversial, "Kazantsev said.
There are other positive aspects to storing your savings in cryptocurrency. For example, bitcoin cannot go bankrupt. If this happens to the bank, customer funds may be lost. In the case of BTC and other decentralized projects, this is not possible.

Bitcoin storage methods, their pros and cons

There are several ways to store cryptocurrency. The most popular of these is on stock exchanges. This is convenient, since assets can be traded and sold at any time if a sharp fall in the rate begins. At the same time, keeping funds on the trading floor is unsafe, Kazantsev warns. The money can be stolen in the event of a hacker attack, or there is a risk that the company's management will hide with the clients' capital.
“Storing cryptocurrency on an exchange is definitely not the safest way. History knows many cases of the theft of crypto funds placed on a crypto exchange, as well as the sudden closure of crypto exchanges with the subsequent disappearance of all those involved. Placing a cryptocurrency on an exchange is more about a rather risky way to earn or lose than about safe storage of funds, ”Kazantsev explained.
Another problem of keeping money on the exchange is trust in it. Despite the fact that bitcoin is a decentralized system, if you keep coins on the marketplace, then they are completely at its disposal. Therefore, there is a risk of losing control over the funds, the company can block them, for example, at the request of law enforcement agencies, said the head of the data analysis department of CEX.IO Broker Yuri Mazur. Although there is no right to write off money from clients' accounts, as suggested in the initiative of Absolut Bank.
“The exchange certainly cannot write off funds on its own. If law enforcement agencies suspect that the money was obtained illegally, then the amount in the wallet will be blocked until the circumstances are clarified. If it is proven that the cryptocurrencies stored in the wallet are indeed stolen, the exchange will return them to their owners. There have already been such cases in practice. After stealing money from other exchanges, the coins were blocked on EXMO, Binance and a number of others, and then returned to their owners, ”Mazur explained.
He noted that many cryptocurrency exchanges today encourage the storage of tokens in wallets. In particular, staking programs have been launched on some trading floors. This feature allows investors to receive passive income for storing cryptocurrency, that is, it works as a deposit.
Returning to the blocking, Kazantsev added that the exchange may resort to such measures in the event of a court decision. Today, in a number of countries, companies have an obligation to enforce court decisions in relation to funds in the client's wallet, which can be seized like a bank account. In addition, in terms of compliance with the requirements for combating money laundering and terrorist financing, sites can block suspicious transactions, for example, at the request of the investigating authorities.
Another, many times more reliable way of storing cryptocurrency is cold wallets. You can keep coins, for example, on a computer, on a USB flash drive or on specially designed devices. In this case, you don't even need an internet connection. The user downloads a key file, without which no one else can access the funds.
The main risk in this case is the loss of the key. The computer and flash drive can break down, be forgotten or stolen. In this case, it is almost impossible to restore access to the cryptocurrency.

The main risk

The storage of funds in cryptocurrency has a number of disadvantages and risks. One of the problems is exchange rate volatility. Bitcoin or any other coin can fall sharply at any time. For example, in mid-March, the BTC rate collapsed by 50% within two days. In such a situation, the user runs the risk of losing a significant part of his savings, and this is the main risk, says Antonina Levashenko, member of the Commission on Legal Support of the Digital Economy of the Moscow Branch of the Russian Bar Association, Head of the Russian Center for Competence and Analysis of OECD Standards RANEPA under the President of the Russian Federation.
“The main risk of holding capital in cryptocurrency is high volatility. Cryptocurrency often cannot be used as a means of payment, a means of exchange or a commodity if its value is unpredictable and changes several times in a month, ”Levashenko warned.
There is a solution. To store funds, you can choose stablecoins - tokens with a fixed rate. For example, the quotes of such cryptocurrencies as USDT, USDC, BUSD and others are pegged to the dollar. On the one hand, this method protects against the volatility that the price of cryptocurrencies has. On the other hand, such assets are issued by companies, that is, the question of trust arises, as is the case with banks.
“If we are talking about storing funds in stablecoins, then it is important to understand what exactly the stablecoin is tied to. The value of a stemcoin can be tied to fiat currencies, the exchange rate of the currency basket, the value of securities, commodities on the stock exchange, real estate, and a number of other values. Their rate may not be stable, and accordingly, the risks of volatility of the listed values ​​will be reflected in the value of the stablecoin and the possibility of storing money in it, ”added Levashenko.
Therefore, in many respects, the reliability of storing money in stablecoins will depend on the asset to which the stablecoin is tied, the expert specified. For the safety of keeping funds, she recommended diversifying the portfolio. You can keep some part of the income in cryptocurrency, for example, 20-30% of the income.

Summary

Cryptocurrency has a number of advantages as an alternative to banks. These include independence from a third party, data confidentiality, bankruptcy protection and others. It is worth noting separately that exchanges provide functions similar to banking ones. For example, staking or landing - both generate passive income.
There are also disadvantages: exchange rate volatility, risk of hacker attacks, controversial status from the point of view of the law. But some of these shortcomings can be solved. For example, to protect against strong price fluctuations, you can choose stablecoins. And the problem of distrust of exchanges is solved by private wallets.

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Crypto Currency, Business Creation & Development Magazine: Russian banks want to write off funds from dormant accounts. How will cryptocurrency respond?
Russian banks want to write off funds from dormant accounts. How will cryptocurrency respond?
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