Bank of America, one of the largest US banking institutions, has recently decided to close the account of the former CFO of PayPal. The decision came without an explanation, despite the fact that he had been a client for over 20 years. The news has prompted many in the crypto community to point out that Bitcoin’s censorship-resistant nature is one of the many factors that make it a viable alternative in scenarios of the kind.
The former CFO of PayPal and current partner at Sequoia, Roelof Botha, announced on Twitter that his Bank of America account has been shut down after 20 years of being a customer. The notice sent to him by the bank informed him that his account will be closed in 30 days.
Commenting on the matter, Botha said:
After being a customer of @BankofAmerica for 20 years, I received this notice today that they decided to fire me as their customer! With absolutely no explanation…. pic.twitter.com/IJu3peiIWX
— Roelof Botha (@roelofbotha) November 18, 2019
Apparently, the bank made this decision “after a careful review” of his banking relationship, without providing any other explanation whatsoever. A lot of people asked whether or not he has been using the account for cryptocurrency-related transactions but so far, Botha hasn’t responded.
In any case, it’s exactly those kinds of one-sided decisions that centralized authorities have the capacity to make that bring out one of Bitcoin’s best characteristics – its censorship resistance.
Having your banking account shut down without an explanation is beyond harmful – it can wreak all kinds of havoc on a person’s finances. Unfortunately, the Terms of Service that people agree to when opening bank accounts oftentimes state that the bank retains the right to terminate the account without providing any explanations.
It is in the shadow of this kind of financial censorship, however, that Bitcoin truly shines. One of the biggest advantages of its distributed and decentralized nature is the lack of central point of authority. No one has the capability to single out a person or an entity and forbid him from participating in the network.
The perks of censorship resistance go further than that, however. A central party can’t invalidate the user’s transactions or reverse any changes. Furthermore, all of the transactions are publicly auditable and a central party isn’t required to ensure that the transactions are valid.
In addition, everyone with access to the Internet can become a part of Bitcoin’s network, irrespective of their net worth, geographical location, business intentions, and so forth.