Why are people seeking alternatives to digital banking accounts? I think this can be broken down to several factors.
1 - 2008. We saw individuals suffer through job loss, while big banks, companies, and individuals working at big banks did not, leaving people with a bad feeling and lack of trust in banking and government.
2 - The technical fact that the money in your account is not yours. You have a balance, but events outside of your control can result in balance shortages. This was reinforced by SVB crash, which could easily happen at any bank if folks were convinced to move money through social engineering.
3 - Cash is useful, but rules making its use less frictionless keep getting introduced (for government revenue and crime purposes). Cash is the only alternative from a traditional banking product offering standpoint to storing money in a digital account. However noble the reason, the introduction of these rules feels like an attempt to limit the use of cash.
4 - Cyber and technology risk is high for all online banking services. Having cash makes some people feel safe for instances of severe weather, telecomm outages, or cybercrime.
5 - Solutions. There could be banking/govt native digital self custody offerings for certain amounts of digital cash (which could be regulated as well). It would be smart to have intranets for banking, electric power which are sealed off from the wider internet in order to provide redundancy for core infrastructure and protection from malicious actors.
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