New Bank Rules Make Monetary Privacy As Important As Data Privacy

We’ve learned the hard way over the decades that if you don’t have physical control of your data, it’s not your data. With the new bank account confiscation rules coming in place, this applies to finance, too: if you don’t have physical control of your money, it’s not your money.

So there you have it. The Cyprus confiscations last year, where the Cypriot government simply swooped in and confiscated/stole/appropriated people’s bank savings, have now become a world standard. Pretty much every world leader has praised it as a very convenient way for a government to save itself, it was made a standard at the G20 meeting last November, and it’s now mandated in the EU.

It’s crucially important to remember that money in your bank isn’t your money. It’s legally the bank’s money, and you have a claim on the bank. That claim can become null and void for a number of reasons. Physical control does matter.

We first learned this, way in the early days of the Internet, when hosting services simply disappeared in bankruptcies or similar: If you don’t have physical control of your data, it’s not your data. (As the first online mail providers went under, all their users’ mail history went under, too. Same thing with storage services. Same thing with early blogging platforms.)

Then, we learned it again as law enforcement started butting into server halls and asking the server hall owners nicely if the police could have access to our servers. With somebody else – the hosting provider – having agreed, we did not get a say in whether law enforcement could just copy all our data and our clients’ data. Again: if you don’t have physical control of your data, it’s not your data.

Then, we learned it again when strict new laws were enacted to regulate control to personal data, and some companies stored data outside of the jurisdictions where these regulations applied – and so, the data leaked according to laws in a foreign land. Again: if you don’t have physical control of your data, it’s not your data.

Then, bitcoin came along. We happily stored our coin with various storage services at first, and then with very large bitcoin exchanges, and learned that electronic money behaves just like data: if you don’t have physical control of your bitcoin keys, it’s not your bitcoin. If you don’t have physical control of your money, it’s not your money.

And so now, this principle has spread to central-bank currencies, too. With the latest revelation of governments planning to seize money from bank accounts pretty much on-demand and at-will, we’re seeing this coming full circle into the privacy sphere – the reason that privacy of finance, data, and correspondence are three equivalent privacies of the seven privacies:

If you don’t have physical control of your money, it’s not your money.

Privacy remains your own responsibility.