Various countries around the world are bracing themselves for what the future may hold. Especially the financial sector is a big threat, as many banks may feel to survive another global recession. Ukraine has nationalized PrivatBank, the largest institution in the country, to avoid a financial meltdown. But this decision does not sit well with a lot of people, and understandably so.

PrivatBank is Now Ukraine’s National Property

According to the Ukrainian government, the nationalization of PrivatBank is a positive development. They now own the institution for the full 100%, and will “guarantee the safety of its clients’ money”. A rather bold promise that may prove to be a lot harder to keep. After all, governments do not have the best of reputations when it comes to dealing with consumer’s money.

PrivatBank had gotten some negative media attention this year over their alleged lending practices. Moreover, the bank’s bonds have dropped nearly 50% in value since these reports surfaced in November. Considering how PrivatBank holds almost one-third of all of Ukraine’s bank deposits, it is not a good sign to see such news emerge about the financial institution. Moreover, this makes the ‘nationalization” process seem more like a government bailout than anything else.

While the claims regarding these “insider loans” have yet to be proven, it is rather odd to see the government intervene in the bank a this time. Closing down the bank would be catastrophic, as Ukraine’s entire financial ecosystem would collapse in a  heartbeat. All the more signs pointing towards as government bailout.

The former owner of PrivatBank, billionaire Igor Kolomoyskiy, allegedly handed the bank over to the government “of this own free will”. Apparently, the was afraid of how this clients would be endangered due to this negative media attention. Rather unusual, as media campaigns can often be shrugged off. Moreover, if there is nothing to hide, why would the bank worry about this news in the first place?

One of the most important things is to know the Ukrainian deposits are still safe within PrivatBank’s vaults. However, now that the government is in control of the bank, there is no such thing as money being kept safe. Smart Ukrainians would pull their money out of PrivatBank right now, before the economy collapses.

It is not unlikely this news will bring more attention to Bitcoin within Ukrainian borders. Unlike traditional money, Bitcoin isn’t to controlled by banks or governments, yet solely belongs to the funds’ owner. A more than viable alternative for the future, as governments meddle too much in private financial affairs.

Header image courtesy of Shutterstock

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