In a panicked attempt to save their own personal wealth, Egyptians rushed to the banks to pull out substantial amounts of cash. As a result, the central bank instructed all other banks in the country to temporarily limit daily cash withdrawals.
“We found that individuals are withdrawing money from the banks although they did not need it ... they withdrew 30 billion pounds in the past three weeks. We want some discipline. We live in a society and we have to think of others.” Tarek Amer, Central Bank Governor of Egypt
The daily cash withdrawal limits in Egypt are now:
a) 10,000 Egyptian pounds ($634.97 USD) per individual.
b) 10,000 pounds ($3,174.57 USD) for businesses.
c) 5,000 pounds ($317.43 USD) for ATM withdrawals per day.
Why Is It Problematic for Banks When People Pull Out Their Money?
Generally speaking, large banks are required to hold 10% cash in deposits. The rest of the money is actually non-existent. Just numbers floating around in the abyss of the cloud. They can't have everyone demanding their money, so are limiting daily cash withdrawals to manage this.
If everyone runs to the bank at once to pull out their money, the bank would not have enough cash to pay everyone what they are due. People would find themselves without money during the most critical time.
A massive financial crisis would ensue. T
his shows just how fickle our financial system is. It could come crashing down with a crisis.
Another Way to Store Your Wealth
Unlike our traditional cash, Bitcoin is a digital currency that is not owned or operated by any banks or government agencies (note:
throughout history we have seen the effects on our economies when banks and governments have full control over our money, which you can learn more about here ).
With Bitcoin, no one can dictate what you do with your coins. If you have 1 Bitcoin you could hold, sell, or trade that 1 Bitcoin - as you wish, when you wish.
This is why Bitcoin is seen as a haven during times of crisis and why we often see people rushing to transfer their wealth from traditional currencies to cryptocurrencies (like Bitcoin). Because with Bitcoin, you have full ownership of your wealth within a system (blockchain) that is secure, robust, global and private.
Read more about it here: Egypt's banks told to limit withdrawals and deposits Egypt controlling cash flow makes case for Bitcoin
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