When you put your money into your bank account, you probably think that it’s your money and that you control it. I would like to agree with you but that’s not quite how the legal system says it works. When you put your money into a bank, they legally own it and your balance is just an IOU from them to you. In short, when you use third-party payment systems, you don’t have control of your own capital. When you use bitcoin, you are the one on control of your own capital.

What Are Capital Controls?

According to Wikipedia, Capital controls are residency-based measures such as transaction taxes, other limits, or outright prohibitions that a nation’s government can use to regulate flows from capital markets into and out of the country’s capital account.

In other words, you are at the mercy of your government or bank when it comes to where you can spend the money that you worked for. Yoru capital (money) is controlled by someone other than you.

Here are just some of the ways that you may be influenced by capital controls.

Capital Limit Restrictions

If you have ever traveled in to or out of the United States, you have been required to fill out a customs form that asks if you are traveling with $10,000 or more of money or equivalent monetary instruments. This is a basic limit restriction that is placed on moving money in or out of the US. If you are moving more than $10,000, then you are legally required to declare that money or face criminal prosecution.

Limit restrictions are implemented at most national borders so look for these signs when you travel next.

Frozen Accounts

If you have ever traveled to a foreign country, you may have had your bank account frozen due to “suspicious activity”. I have had this happen a couple of times. In order to unfreeze your account, you need to contact your bank and prove your identity to them in order to have your access to your account restored. While this may seem relatively hassle-free, it can actually prove to be rather difficult when you are on the other side of the world and don’t have immediate access to a phone line to call back home to your bank. I once had this happen just hours before I needed to pay for a taxi to get to the airport. It was a massive headache and really stressful to get it unlocked. I actually ended up missing my flight back to the US and had to but another one.

A frozen account is just more proof that you do not control your own capital.

Legacy Payment Systems & Custody

One of the main problems with using a legacy payment system is that it puts someone else in control of your money and financial future. Back in 2008, there were a lot of people who learned the hard way that putting multinational banks in charge of their retirement and pension funds was a terrible mistake.

Your Bank

When you deposit your money into your bank account, you may think that you are in control of that money. Indirectly you are because it is your debit card that you use to purchase goods and services. The reality of using a bank is that the money in the account is simply an IOU that your bank owes you money when you request it.

They can shut down your account and even seize all of your accounts and holdings if your account gets flagged for suspicious activity which also happened to me with more than one bank when they saw that I was buying something called “Bitcoin” with a service called Coinbase.

VISA

VISA. It’s everywhere you want to be. Well, at least it is if they can turn a profit there. It is one of the largest and fastest payment networks in the world. If they decide that they want to prevent you from being able to transact, they have the ability to prevent you from using their payment network.

PayPal, Venmo, The Cash App & Others

Online payment networks like PayPal, Venmo, TransferWise, The Cash App, and others are all great services for sending and receiving money across the world as long as you’re ok with them knowing everything about who you are sending to and receiving from. I touch on this in more detail in Reason 24 but when these centralized payment services don’t like what you are doing with your money, you run the risk of having your money seized.

These sorts of payment networks are also in control of your capital since you have to have it on their centralized servers. While I think that using the Cash App is possibly one of the best ways to buy bitcoin with the legacy banking system, they are still a custodial service unless you remove all of your bitcoin and send it to a wallet that you control the private keys.

Western Union & MoneyGram

Western Union is one of the oldest payment networks in the entire world. In fact, it was actually the first company to send digital money. Western Union actually began as a service for sending messages by wire called a telegram. It didn’t take long before they began using cryptography, the underlying technology in Bitcoin, to send money by wire from one part of the US to another.

Western Union has been a major world money transmitter ever since then and it still sends more money internationally than many countries generate within their own economy. These payments are still vulnerable to someone else being in control of moving money. Western Union is subject to countless laws across hundreds of jurisdictions and capital controls are just some of those regulations.

Use Bitcoin

Capital controls are just one of many ways that banks, governments, and large centralized institutions are able to control your life and money. What the world needs is a system that isn’t owned and operated by the people at the top of society but rather by the people who are sending and receiving the majority of payments.

When you use Bitcoin and have proof of your own private keys, you are the one who is in control of your capital. Nobody else. If you want to send it to someone else, all you need to do is get an address from your recipient and you can send the payment. Period. You have control of your own capital; not your bank, not PayPal, not VISA, not Western Union, not MoneyGram or anyone else. YOU. When you fully realize how much this matters, bitcoin will become a much more important and valuable tool for you to achieve financial freedom.