from Balaji | by Balaji

This also happened in Cyprus. A bank legally stole depositor assets. While running ads saying they were safe. The EU backed them up. So many stopped trusting banks. ~25% of deposits moved out. Much into physical cash. Mattresses became safer than banks. t.co/LzJfVE2FPN t.co/Fj1lBRb0uQ t.co/NeR0YAvXjO

The Cyprus bail-in is worth understanding in detail. A good chunk of wealth just permanently moved out of bank accounts. t.co/LzJfVE2FPN t.co/9ziaoixiGH

Ten years later, physical currency is less viable. It’s all digital now. And the Cyprus bail-in makes you look at FedNow’s consumer-to-government payments in a different light. It could facilitate Cyprus-style deposit seizure at the speed of light. t.co/2ZuF7n8qI6 t.co/gZE7kwbyvf

In practice, it’s more likely to be stealth devaluation via $18T in “FedDic”[0] than outright account seizure, though to be fair we’ve seen the latter used against eg the Canadian truckers. But Cyprus was still a preview of many of the same debates we’re having today. IMF types… t.co/yrZK9ooiTD t.co/qvM3S9AUHw