Personal Digital Wallet Instead of a Bank Account?

[Zhorro]

Given that high street bank branches are closing and that people are being forced online, this is giving banks (and even Goverenments) greater control over our funds.  Who has not had a transaction declined by a bank?

I was wondering whether there is such a thing as a personal digital wallet for fiat currency which would be on your own computer rather than having money in an online bank account?  This would be similar to the personal digital wallets people have when storing crypto currencies but it would be for storing fiat currencies.  The technology must exist if crypto investors use it.

The advantage of such a system would be that people could have their salaries or other income paid directly into a personal digital wallet (thus by-passing the bank), and then payments (transfers, direct debits) could be made to other personal digital wallets or bank accounts.

Other advantages of a personal digital wallet would be:

·         Your money would not be under the control of a bank,

·         You would not be affected by any bank runs, and

·         You would not get caught up in any bank bail-ins (like Cyprus in 2013),

Banks would then have to compete for your money and offer a decent return on savings.

I suppose the big risk with this would be if your computer is damaged / stopped working or was stolen, as your money is in the wallet which is on the computer, then it would be lost!

Any thoughts?

 

I've just seen this article about the Nigerian Government limiting cash withdrawals from banks to the equivalent of $45 per day - which I think shows the importance of looking for an alternative to a traditional bank account:

https://www.zerohedge.com/political/nigeria-limits-atm-withdrawals-45-day-force-digital-payments

[Anteater]

Basically it would require government support - that's the only way you get everyone to agree that the numbers in your digital wallet are worth actual pounds sterling (or any other fiat currency). Currently there seems to be little motivation for a government with a major, stable currency to set this up.

Bitcoin et al are different because they value is created by confidence based on rarity/proof of work and utility, but they are volatile due to uncertainty and have become more of a vehicle for speculation than a currency.

The closest existing thing to what you're talking about are probably fiat-linked crypto currency "stablecoins". But in these cases you are still trusting a non-governmental intermediary (with the attendant counter-party risk) who has to hold the fiat currency that backs the coins. These haven't always proven to be as stable as the term "stablecoin"  might suggest and they certainly don't have wide acceptance for transactions like the underlying fiat has.

Edited December 8, 2022 by Anteater