Why Money Needs To Move Into the 21st Century

For a long time, so much of our banking system has seemed antiquated to me. ?Even as a child visiting Europe, I remember thinking how frustrating it was to have to stand in line to change money, and I could tell the exchange price differences were outrageous. It’s also easy to cheat people. ?I once had an exchange teller hold back $200 worth of my money, and if I hadn’t used a calculator, I’m sure it would have gone into his pocket.? Then there was the time when I was in Rome (recently, so you would think I would’ve known better). We had already transferred our money into euros only to discover that the bank was charging two separate sets of fees and only advertising one of them; this at the main exchange in one of the city’s largest train stations. Of course the sign said NO REFUNDS, and this was why.

Then there’s the matter of arbitrage (extra bonus points if you even know what the word means). ?Arbitrage is defined by Merriam Webster as “the nearly simultaneous purchase and sale of securities or foreign exchange in different markets in order to profit from price discrepancies.” Arbitrage is where the bank will bury its fees. So when ￡1 costs $1.50, even though you can see those rates right there on Google, you may find yourself paying something more like $1.75 for that same single British pound. The difference is the arbitrage fee.?It’s always seemed wholly unfair and something that we can all look forward to eliminating as we move toward DeFi (decentralized finance).

Last week, I needed euros. After checking around with multiple people in the Miami area (a place where euros should be very easy to get as it’s one of the gateways to Europe) folks all suggested to go to my bank, where I had already checked and seen that the rate almost 10% higher than the exchange rate I saw online.?I bank at one of the biggest banks in the US. Now I went to two branches, because my local branch apparently no longer can give me access to more than $3000 USD in cash and has no ability to exchange money. ?Thanks, Covid, but it’s just another nail in the coffin of paper money.

First I drove for 20 minutes to the branch that could sell me the euros, then stood in line for 15 minutes waiting for a teller to be free. Next, I was told that for $12,000, I had to make three separate transactions because each one could only be a maximum of $5000.

Then I waited…

and waited…

and waited.?

Ultimately, it took over another half hour for the teller to complete that part of the transaction.?I say "that part" because they then had to order the euros and I had to drive back to pick them up. The day before, worried that I was going to drive all the way over to discover the money wasn’t there, I called them a dozen times, but no one ever answered the phone. When I complained, the bank said they had called me three times to pick the money up, when in fact they had called me zero times: Caller ID plus no voicemails. Excellent service.

They counted out three envelopes that matched the three receipts they had given me the week before, and for this delightful experience, charged me $900. NINE HUNDRED DOLLARS. Plus almost three hours of my time on two separate Saturdays.?Just so that I could use a currency in a foreign country.?Yes, I could have waited until I travelled and because I was buying instead of selling in a country that accepts euros, the fee would’ve been less. Except that I needed it the day that I arrived and couldn’t wait.?Maybe then it would’ve only cost me $450 or $500.?I say “only” as a joke because it’s all ridiculous.

Had this been an exchange made in cryptocurrency, such as Bitcoin, I would have been able to transact instantly for almost $0 dollars.?I can send money and receive money to anyone else with a wallet. And because the transaction is so fast, there’s very little room for volatility even in the current swings of a full bull market.

There are many industries in need of reform that digital media is helping to facilitate: insurance, healthcare, mortgages, etc. ?Money is an industry, make no mistake. And those who are the gatekeepers had better look out, because this is going to be a whole new ballgame – one that we desperately need.

PS. If DeFi and crypto aren't on your radar yet, or you think they are scary, START HERE