No one is disrupting banks – at least not the big ones

At least we pretend to have accountability in the government.

This was actually a fascinating research topic for me, because I can only agree that it seems arguably hostile or at least silly and backwards.

I found that the provision in question. The part of the bill defining "food" as "any food except hot food" was actually from the rewriting in 1977, where it was added to (and this comes from a single second hand source) supposedly ensure fair competition with fast-food joints that can't accept foodstamps. To me, nothing indicates that the intention of the government officials was to restrict the choices of recipients, but rather to ensure fair competition. One member, along with a few (maybe two) supporters even bring up the idea of restricting choice based on "nutritional value", but the others tear it down calling it wrongheaded and administratively impossible (my words).

This is interesting because what we don't see is a majority of the house that is OK with restricting choice for the subjects own good, or for some notion of health. Instead we actually see members very hostile to the idea of restricting choice based on "health". The path for such members to accept a restriction anyway is by putting it against something they value more, the fair competition of the free market.

The people who are restricted by the "hot food" limitation is not the recipients of snap, it is the store owners, who are supposed to be banned from competing with KFC.

This is all seen as acceptable but try tying a tax break to hiring or investment and you'll hear screams from the stock buyback board

It's meant to prevent side hustles like buying Big Macs and selling them for cash.

Requiring people who get government money for food to not use it on prepared food is a good thing I would think. Technicalities like the one you presented do seem ridiculous on their own however.

That would indeed be a bad point, and basically a conspiracy theory. I do not believe that.

My point is that "The Government" is not a singular hivemind, and can't be meaningfully analyzed as such. There are people, those people operate as part of The Government, but any analysis cannot be separated from the person or their affiliations.

Saying "The Government did X" only leads to the misunderstanding that "X" wouldn't have happened without The Government. In reality, "The Government" was the hammer that person "A" used to do "X". Had he not had that hammer, he could have used another.

The Federal Reserve is a bank. And we already have a relevant historical example to examine, postal savings accounts. I'm not aware of any special power that the executive branch had to bypass the judicial branch where those accounts were concerned, versus privately held accounts. Plus, the Post Office was directly answerable to the President then, while the Federal Reserve has never directly answered to the President. This is an unfounded fear and doesn't reflect anything intrinsic to a (central bank-administered) digital currency.

Whether to nudge or to force is a policy choice, and is orthogonal to the question of digital currency.

It only remains if people who have choices actually prioritize using cash.

I get strange looks from folks now since I try to use cash whenever possible to do so.

If I’m the only one taking the effort to do this, everyone will eventually lose this option. It’s incredibly frustrating to watch people actively work to not understand this point.

All so they can make 2% in credit card points, pretend they are at some materially increased risk of crime, and the convenience argument. None of which are very compelling compared to “a third party now mediates what spending you are allowed to partake in”. Works until it doesn’t.

It _could_ be like that. But we’re very deep down slippery slope hypotheticals by this point.

In some markets paypal has no market share at all - its whole value proposition is something that banks allready have.

Paypal is needed in USA due to archaic systems. In Europe many banks allow instant transactions without the risk of blocking your money for 180 days - what paypal seems to do

FATCA makes Americans pariahs at foreign banks. I would love to store cash outside US jurisdiction but it is a compliance nightmare usually only worth it for high net worth clients. We know better systems exist, we just often can't use them even when we live overseas.

Crypto is the last offshore banking for the middle class. It essentially took over right when FATF eliminated banking privacy and bearer shares -- which IMO is no mere coincidence.

I (American) didn't need to go to a branch office for my mortgage. In fact, I don't think my mortgage provider has branch offices.

Just curious, why do you need a video chat? Can't you just have a phone call? I don't get the need to see someone's face

I don’t even need to have a video chat in the US for a mortgage. I have long been able to shop from any number of lenders and close the deal via email. The lender might send out an appraiser.

    > worker 401k vulnerability to dubious ETFs

As I understand it, Wealthsimple was founded independently but then quickly bought by Power Corporation.

It is indeed quite interesting that its innovation and competitive pricing (https://news.ycombinator.com/item?id=42838063) in the last couple years has happened under old, established Power Corp.

Any educating theories about why this is happening now?

Interesting. I did not know that. But not surprising in retrospect.

But I think the point still stands. WealthSimple is probably not perceived by the median customer as a traditional bank. So people using it is a counter-example to GGP's point that people won't use "startup" banks.

Ah that's an interesting tidbit. I have a Wealthsimple account through my (YC company) employer. The Desmarais (Power corp folks) gave me a scholarship back in the day. I hadn't made the connection.

Tangerine still insists on making login credentials your account number, and a 4 digit pin. There used to be a second system where they'd show you a secret combination of images after login and you'd provide an answer to one of four security questions, which kinda made things better as I just provided passwords as the answer to the questions, but now they've replaced that with drumroll SMS 2FA.

Security is a clown show at Tangerine, I no longer use it and can't suggest other folks do.

Hey, you can assert cops are the real criminals all you want - but one of them is thrown in jail, and the other (typically) isn’t.

> There is no pre-verification of authorization whatsoever.

There actually is a way they can sync up to say this is an authorized regular transaction and they get the ability to keep charging even when the old number expires and a new card gets issued.

I forget what it's called, and I don't believe it's supported everywhere.

It is a legally enforceable relationship with your investment managers: "A fiduciary financial advisor is a financial advisor who is legally and ethically bound by fiduciary duty to serve in your best interests"

This detail becomes important when various cons come around to bleed off your assets. Could be as simple as a "friend" hyping worthless pump-and-dump stocks, or a fund manager with ballooning fees.

In general, the lack of impulse control shown on YC seems to indicate this information is not that useful for many readers. Some people like being poor apparently lol =3

> never saw this term before

They’re mixing up a securities term (irrelevant to banking per se and cash management totally).

What they mean is getting an adviser who is bound to act as your fiduciary versus as a counterparty [1]. If you’re trusting your portfolio management entirely to a third party, they should be a fiduciary.

That said, people outside finance seem to make a bigger deal out of this than it is—in America if you’re a retail investor and you have a problem with a FINRA-member broker, FINRA arbitration will almost always side with the retail investor. Fiduciaries will tend to cost more (it’s riskier) and say no to you more; after all, you’re asking them to take decisions for you. I work in finance and couldn’t tell you which of my managers and advisers are fiduciaries because I double check what they say and limit what they can do. And this, again, has to do entirely with investments. Not banking.

More pointedly, this part is nonsense: "most people with under $2m in cash can't afford the bonded fiduciary services." What you want for cash management is yield (reward) and sweep (risk management).

[1] https://www.investopedia.com/financial-edge/0912/5-misconcep...

> Buy gold bullion, rent a bank safe deposit box, store it there

This is the worst of all worlds. You have a high-transaction cost volatile asset in a box which provides you with less legal protection than crap stored in a home with renter’s or homeowner’s insurance [1].

[1] https://www.nytimes.com/2019/07/19/business/safe-deposit-box...

Precious metal prices rarely track with inflation, but 1.7% of a portfolio should contain such leaky holdings.

While it is currently legal for US citizens to own gold bars since 1974, if the tax man gets hungry... the old rules may come back into popularity.

Best of luck, =3

> At least with some precious metal, it has a floor value as a function of its practical uses and abundance.

I don't really give this argument much credence any more. If the value of, say, gold or diamonds were to drop their practical-use-floor-value, they'd be valued at probably less than 1% (maybe much less) of current value. I mean, how much gold is actually consumed by industry? And we even have industrial diamonds now.

A friend argued to me that crypto is "A Terrible Thing" because its just used to fuel the (illegal) narcotics industry. At this point, I'm doubting that too - the market cap of all crpyto, and the value being transacted e.g. daily volume, has increased massively recently. Are we to believe that narcotics have caused that? I can't imagine so - more likely to me it's around 90-99% speculation which, you might well argue, is "Another Terrible Thing."

That's true of everything we use as money, including precious metals. You can't eat them, live in them, use them as weapons, walk down the street in them. They have value bacause we all agree that they do and we all agree to use them as a means to exchange that value. Also, and this is important and I should have said it first, they have value because their supply is restricted.

The same is true for crypto. It's fungible, private, and limited in supply. It's also independent of governments although they are doing their level best to correct that.

And fiat currency isn't purely about perception of value?

Just as not all crypto is equal, the Zimbabwean dollar isn't remotely like the Swiss frank, just as bitcoin isn't remotely like hawktua.

> It’s purely about perception of value

All money has always been about perception, whether we used paper, shiny rocks, or sea shells as money, it’s always been about perception. Is it real or counterfeit, do you trust the person you’re transacting with, are enough people you know using it, and will people with weapons show up to protect your money if someone else tries to steal it?

The “people with weapons” part turns out to be a key component. The novel thing about crypto is that you are less reliant on the “people with weapons” to protect you and tell you what you’re allowed to do with your money, and more reliant on the “people with encryption”.

> That’s the thing I can’t ever come to understand about crypto. It’s purely about perception of value.

It's not though. It became about that, in general, but there are crypto projects out there which don't focus on hype or valuation.

It is functional and useful to be able to move value worldwide for 10% of the energy of a credit card transaction, decentralized, at sub-second speed, with no fees, even when just moving tiny fractions of a cent.

There are a lot of maxis and bag holders trying to prevent people from figuring that out, but sooner or later a crisis will hit and everyone will remember what crypto was about in the first place.

> At least with some precious metal, it has a floor value as a function of its practical uses and abundance.

Suppose the price of gold is 80% perception of value and 20% utility for making electronics etc. Then if you buy it, 80% of what you buy is perception of value. You could get the same result by buying 80% Bitcoin and 20% commodity rock salt. Is someone who buys the latter any more of a sucker? What about somebody who then decides to divest the rock salt because it has a below-market rate of return when they have no direct use for it?

There’s at most a zero floor value on holdings of government debt, corporate equities, bank holdings, and any asset held by a custodian.

The floor value of physical commodities with significant storage costs is negative.

The market is aware of these possibilities and these risks are generally recognized as being embedded in asset prices as premiums.

In this specific case its also about buying access, so I doubt he'll rug pull, he can just direct the access requests to buy something.

It’s a funnel for foreign bribes. That’s literally the only utility of these Trump coins.

Are we really free not to be part of it ?

This administration is also creating a sovereign wealth fund, which trump will exercise significant control over, I would be shocked if crypto and his coins specifically are not included.

We are paying for it all one way or another, either with taxes or more likely higher inflation.

You and I are free to not buy it, but that doesn't mean Russia or b Saudi's or China or Zuckerberg isn't going to buy a bunch to influence our president

A sitting president profiting off the presidency is a hall mark of a corrupt state. Doing it so openly suggests there's nothing stopping from doing so in much subtler ways too.

Huh, from about 150/yr from 2000-2008, not one from 2011-2016, 10/yr 2017-2023. Interesting.

No to paying taxes, mostly because the asset you'd have is an apple... The corner store at least has a receivable, but the IRS still won't accept that from them.

But, at least in the US, before the national bank acts in the 1800's, various taxing entities specified which bank notes (or other assets) they'd accept and not accept. It was basically whichever bank notes circulated the most with no/little discount, some gold/silver coins, some government bonds. Ie acceptance by a taxing entity isn't really a clear line on "is/is not" money.

Trading receivables has been going on forever, happens today, is totally legal. The corner store could sell the receivable, and many businesses to sell their receivables.

>How long will your corner store survive if the IRS found out you were processing transactions in your own currency?

Offering someone credit in USD isn't making your own currency. The closest widespread version of that are community currencies[0], which the US doesn't seem to particularly care about -- I'm guessing because they're generally pegged to the dollar and promote local economies.

[0] https://en.wikipedia.org/wiki/List_of_community_currencies_i...

You didn’t say currency, you said credit. But it doesn’t matter, lots of non-US chartered institutions historically create US dollars. There are some treaties around it now but in the beginning English banks created the Eurodollar system with no control by the US government.

Yup it's in the ~10's every year more or less.

Sure, but because of fintech not as many need to get created. Fintech has made it relatively easy for new entrants to work with partner banks through BaaS platforms.

Sure it is. In fact, it's fractional banking where the fraction is 0.

Consider how much business can be done on credit, and what constrains it. Infinite, and nothing. My corner store is not required to hold reserves against it's receivable. Apple (or a telco) is not required to hold reserves against it's receivable for a phone on credit. Their suppliers aren't required to hold reserves against credit on them. And so on all the way back to the folks digging stuff out of the ground.

Alice gets a 400k mortgage at bank A, so she gets 400k in credit at her (new?) account at the bank. Alice then pays to Bob for the house by transfering the 400k to Bob's account at bank B. No real money or gold is moved. Alice owes bank A 400k with money slave interest rate (e.g. 7%), bank A owes bank B 400k + interbank interest rate (e.g. 4%), and bank B owes Bob 400k (but they phrase it as "he has credit").

Both Alice and Bob's salaries are just credit at banks in the same system. If they sell their cars they get money from the same system. There's no way out.

The banking system's accounting trick to create money was proven by prof Richard Werner.

The limits on cash transactions are growing. To pay for something like a car you'd need a bag of papers as higher denominations to match inflation would never be printed. Cops can seize cash without much of an excuse. Customs can seize cash over 10k without much of an excuse.

A small bank can only go down if other banks don't trust them. Like SBV a couple of years ago. But their assets are taken by a bigger bank. Lehman Brothers was a rare exception and it looks like Goldman wanted them to go down for some petty reason. But the AIGs will always be bailed out.

More small banks going belly up and more bailouts are coming. The world is reducing exposure to dollar. Central banks are selling US treasuries and buying gold. The US dollar's empire is crashing down and the Western banking cartel is getting desperate. They'll try to drag the world into war or some other old trick.

It's not net zero because you collect all the interest on money you didn't have to begin with and created out of thin air via an accounting trick.

Now obviously the liability will get zeroed out in the end, but in the meantime you get to keep all that accumulated sweet interest for ... uh... "managing risk"... it's a very beautiful thing!

So you have in fact created money out thin air, it's in the interest payments! You pay interest for basically "nothing!" (cough, cough, "managing risk"). And that interest does not get zeroed out! It's "pure" profit from an accounting trick.

The transaction is balanced in isolation, but the initial part (actually giving the money) is allowed to be negative for the bank as long as they're within their leverage ratio.

So yes, as a whole the bank gives money from thin air.

It goes up the chain to the central bank.

N26 did it but creating a new bank attracts money launderers and scammers. The legal department costs are infeasible and half a century-old systems are not easy to adapt to new banking concepts. The government and regulation side of the system needs serious improvements in Germany to bring them to 21st century first. However, there is little economic incentive to do so. With an aging population and deeply conservative culture, there is little political incentive to improve any infrastructure. The current governing parties will probably lose the election next month because they made costly infrastructure fixes.

There comes a point where a reverse merger makes more sense. You want to be a bank? Buy one. You want to be a “different” bank? Buy one that’s at a tipping point and make your agent of change pitch.

When the USA doesn’t stand you can go to China for the banking.

I get a couple of cheques a year from family in the UK. It's an infrequent transaction but an important one, and cheque scanning is actually the only reason I maintain my legacy bank account.

ppl dowvoting facts now

I would hope so. I certainly do. In 25 years of using them, I have never had a conventionally regulated financial institution (NCUA-insured credit union, FDIC-insured bank) lose so much as a penny. Whether they are keeping proper reserves is another question entirely, but also not really my problem (NCUA and FDIC exist for a reason).

US banks do pay interest. If you're not earning at least US federal funds rate minus ~50bps, that's on you for not choosing to spend 5 min to open a bank account.

https://www.doctorofcredit.com/high-interest-savings-to-get/

Capital One/CIT/Citi/PNC/Apple Card/Marcus/Ally/American Express are all reputable, big banks with long histories.

No it doesn’t. But I would never keep large sums of money uninvested in the market and in a CMA anyway.

https://www.fidelity.com/spend-save/fidelity-cash-management...

if i transfer money from one bank's account to another, it takes minimum of 48 hours if I make the request before 3pm cutoff time. Day 1, the transfer request is made at 1pm. Day 2, the money is no longer available in the sending account yet not in the receiving account. Day 3, the money is available in the receiving account. If I do it after 3pm, the request is not placed until Day 2. Why? WTF does a computer have a cutoff time? Does it go home and cook dinner for the family and do homework with the kids?

>took some form of electronic payment

These are nothing but electronic requests. No human needs to be involved, yet here we are. But sure, let's go ahead and argue like I don't have valid issues because you seem to not have any.