“Money, money, money must be funny in the rich man’s world,” are some of the lyrics we can hear in an iconic song by Abba. And the rich man’s world is often associated with a “Swiss bank account.” Why is it so attractive? Is it really just for millionaires? Can Bitcoin or other cryptocurrencies fulfill similar functions as a Swiss bank account?
According to the Swiss Banking Act of 1934, Swiss banks cannot reveal an account holder’s name. Thus, the accounts in a Swiss bank are considered confidential, private and secure. It is because of these very protections why Swiss bank accounts are sought by banking customers globally. (Just a note: If privacy is so important to you, you should not open an account with a Swiss bank that has a branch in your country. The privacy features of a country branch will not be any bigger than in a standard bank, since such a branch must follow the laws of that country.)
The Benefits of a Swiss Bank Account
The Swiss bank accounts provide extremely low levels of financial risk. Moreover, they offer their account holder considerably high levels of privacy: Swiss banks shouldn’t disclose information related to an account without the depository’s permission, including its very existence.
Also, the Swiss economy is among the most stable in the entire world, with no involvement in any economic conflicts for hundreds of years. The Swiss banks must also have powerful depositor protection and high capital provisions.
All these features combined provide a good guarantee that all deposits are safe and secure.
Opening a Swiss Bank Account
The type of account will depend on, for example, the amount you want to sustain in the account. Essentially, the more extensive the financial investment services and options are, the higher the required balance for the account. If you are willing to pay the fee, there is no minimum. To avoid the fees on a standard depository account, non-residents need to start with a couple of thousand dollars. Some clients also take advantage of a safe deposit box at a Swiss bank.
Swiss anti-money-laundering laws require a potential Swiss bank account holder to supply all kinds of files and documents in order to open an account. These will generally include validated copies of your passport, in addition to documents explaining your occupation, proof of the source of your money, tax returns, company documents, professional licenses.
To open a numbered account, you must visit your bank in Switzerland in person. An initial deposit is typically at least $100,000 and the maintenance fee is a few hundred dollars per year.
Most importantly, you need to submit documents, proving your identity. Likewise, there is a selection of minimum balance requirements that depend on the type of account you desire. Those who are not homeowners of Switzerland have to be at least 18 years of age to open a Swiss checking account.
You can choose the currency for your account. Accounts held in Swiss Francs will benefit from a small interest, but you will have to pay the Swiss withholding tax. To avoid this tax, you can choose to hold your account in another currency, such as Euro, USD or British Pounds.
To sum it up:
- People tend to choose Swiss banks mostly because of their security, privacy and very low levels of financial risk.
- Still, a Swiss bank account is not anonymous, since you have to provide your personal details and documents when opening your account.
- A Swiss bank account is still regulated and in some cases, your details can be given out by the Bank.
The question is, can similar, or even better features be obtained in a different, and perhaps even more accessible manner in our digital age?
Bitcoin: Peer-to-Peer Freedom
No matter how safe Swiss bank accounts can be, they only hold fiat currencies – Swiss Francs, Euros, USD, British Pounds, etc. Simply put, a fiat currency is money that a government has declared to be legal tender. As it is not backed by anything tangible or physical, such as gold or silver, it can be freely printed “out of thin air.” That’s why it is susceptible to inflation or state intervention, since fiat legal tender belongs to the state.
On the other hand, with Bitcoin and other cryptocurrencies, the situation is totally different. If we stay with Bitcoin, the total maximum supply is final – 21,000,000 BTC – more Bitcoins will never become available. Thus, Bitcoin is deflationary because Bitcoin’s purchasing power can increase over time. The transactions are peer-to-peer, with no intermediary, no central authority, no bank in between your transactions, which means that only you decide when to send your payment and to whom you want to send it. Although Bitcoin transactions are not 100% anonymous, there are ways to make them almost completely untraceable. Or you can use some other cryptocurrencies that have absolute anonymity as part of their technology.
Bitcoin: A Swiss Bank in Your Pocket
With Bitcoin and other cryptocurrencies, you can easily create a new address for any new transaction, which is like having an unlimited number of Swiss bank accounts. Since it is only you who can own the private keys to your cryptocurrency, it is even like having an unlimited number of private Swiss bank accounts.
That could be the reason why President Barack Obama made the following statement about cryptography and cryptocurrencies back in 2016:
“If technologically it is possible to make an impenetrable device or system where the encryption is so strong that there’s no key, there’s no door at all, then … what mechanisms do we have available to even do simple things like tax enforcement? Because, if in fact, you can’t crack that at all, the government can’t get in, then everybody’s walking around with a Swiss bank account in their pocket.”
It seems that he was not very keen on the idea that everybody could easily be “walking around with a Swiss bank account in their pocket.”
A cryptocurrency advocate, Andreas M. Antonopoulos, countered this statement in the following way:
“Crypto is not like having a Swiss bank account in your pocket – crypto is like having a Swiss bank in your pocket.”
This is a very powerful reasoning and something to really think about.
Bitcoin: Power to the People
Back in 1971, John Lennon was singing:
“Power to the people
Power to the people, right on
Say we want a revolution
We better get on right away
Well, you get on your feet
And into the street
Singing, power to the people.”
Bitcoin and cryptocurrencies look like real power to the people, like a real financial revolution in the making. At this time, only a small percentage of people know about the crypto, and an even smaller percentage uses it. But the numbers are growing every day, and those who use crypto have real power and freedom in their hands.
Crypto can be very attractive in places with unstable economies, such as Argentina, Venezuela, Zimbabwe, Iran, etc. People over there can try to protect themselves by buying e.g. gold or silver or they can start using cryptocurrencies. The advantage of crypto is complete control, absolute freedom, total power and independence. With crypto, you are outside of the system of control and fear.
Theory is theory, and life is life. Once you start using Bitcoins and other cryptocurrencies, you can see all the power by yourself. You can make your first transaction with a very low amount, with the equivalent of just a few USD, to see how easy it is and how things work. This will probably whet your appetite to follow on and get more power and more advantages.
Nowadays, you can experience first-hand that it is easier than ever to have not only a Swiss bank account in your pocket (in your crypto wallet) but also a complete Swiss bank in your pocket.