Offshore Account? Bitcoin as an alternativeOn July 2, 2019 by Frances Ferebee
Bitcoin as an alternative is a connection we hear quite often. Today, however, we will try to focus on this Bitcoin feature with a different lens, from the perspective of the offshore sector. So what is the offshore account? In short, it is a bank account with a bank located in a country other than that of the account holder. Offshore banking is often simply associated with the term tax haven. Let’s look at the whole issue in detail.
According to publicly available data
Offshore banking reaches nearly $ 40 trillion, an enormous figure, nearly half of the world’s annual GDP. Who can open an offshore account? The answer is simple, anyone who has access to banking services, both businesses and individuals. These accounts are widely used for tax optimization, mainly by large companies. Rich individuals hide their capital from local tax authorities using accounts abroad. In recent years, however, offshore banking has become interested in the middle class and uses it for legal and taxed returns.
Offshore account and its advantages
There are several advantages. In offshore banking you will find institutions that provide an alternative to savings accounts, not only in the exotic currencies. Opening an offshore account denominated in dollars or euros is not a problem and the annual interest rates of the best offers range between 5 and 7%. These rates are noticeably lower than in local currency savings accounts, but there you have to count with currency risk.
Another significant advantage is diversification. If you have funds in banks of only one state, you run the risk of the economic and political state. Citizens of the state where capital controls operate (eg China, Russia, India, Greece) could tell about it. Following the last crisis of 2007-2008, the need for diversification has increased considerably.
Bitcoin as an alternative to offshore banking
Bitcoin is a de facto type of offshore account in a virtual environment with several significant advantages. Each bank has a KYC procedure, so if you want to open an offshore account, you must provide the bank with information about yourself. But this is not true of Bitcoin, we still have options to withdraw funds and avoid verification, for example using bitcoinmas or personal exchanges.
Another significant advantage is that with Bitcoin
You always have funds available and can be handled as you please. You do not bear the risk of another entity, in this case a bank with an offshore account. Nor do you bear political and economic risk. Last but not least, Bitcoin has the advantage of being available to everyone. Over time, there is a growing community of people who understand Bitcoin as a store of value.