When I opened my first bank account, the process was straightforward. A signature, a form of identification, perhaps a conversation with the local manager, and one was welcomed as a customer. Today the same relationship requires considerably more formality. Proof of identity, documented addresses, background checks, and rightly so. Any responsible financial institution must verify its clients to prevent fraud and money laundering. These are not unreasonable demands, they are prudent safeguards.
Where the risk begins is not in such proportionate checks, but in the broader tendency of governments and systems to centralise. It is one thing for a firm to confirm who its client is. It is quite another to fuse employment, healthcare, taxation, travel and banking into a single digital key. That move shifts the balance. It creates a concentration of power which, by its nature, carries the risk of overreach or misuse.
Britain’s digital identity proposal
The United Kingdom’s renewed interest in digital identity cards reflects this shift. The stated purpose is to prevent illegal working and to make public services more efficient. Yet anyone who has observed the slow expansion of state systems knows that tools designed for one purpose rarely remain confined to it. Over time they are extended, cross referenced and embedded across new domains of life.
The risk is not that a digital ID will be useless. On the contrary, it will be highly useful, so useful that it may become indispensable. What begins as an optional convenience can end as a precondition for basic participation in the economy. That is when a safeguard becomes a point of leverage.
Vietnam’s account freezes
Events in Vietnam illustrate how quickly this leverage can be exercised. Reports indicate that more than 80 million bank accounts were recently frozen as part of a campaign to reduce fraud and tidy inactive records. In a country of roughly 100 million, this is not marginal. Whether the authorities view it as good housekeeping or a step toward greater transparency, it demonstrates the scale of action possible once financial access and identity are tightly coupled.
No one disputes that fraud prevention is important. But it is striking to see how entire categories of citizens can suddenly lose access to their accounts, not because of a direct failing on their part, but because of a systemic sweep. The lesson is not that fraud checks are wrong, but that centralisation creates the conditions for very large interventions, the consequences of which may be unevenly felt.
The one way ratchet
One feature of such systems is that they rarely contract. A measure introduced to respond to a crisis or a perceived weakness seldom disappears once the immediate need has passed. Instead it becomes part of the permanent architecture. The next crisis invites another layer, and the system grows more complex, more interdependent, and often more fragile.
Economic history is full of examples. In the 1930s, President Roosevelt’s restrictions on private gold ownership in the United States were introduced as an emergency measure. They remained for four decades. In Europe, post war capital controls were framed as temporary tools to defend currencies but became embedded features of economic life until the liberalisations of the 1980s. In both cases, the measures endured far longer than their original rationale.
Psychology offers an explanation. The Milgram experiments of the 1960s showed how readily individuals comply with authority, even when they feel uncomfortable doing so. In economic systems, much the same dynamic plays out. Citizens accept new rules because they are told it is for the common good. Over time the incremental changes add up to a structure few would have chosen in advance, but which most adapt to because it has become the norm.
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Complexity and counterparties
The result of this incremental build up is that the distance between the individual and their own money lengthens. More layers, more counterparties, more checks. In principle, each layer is defensible. Together they create a structure where an error, a policy change or even a misclassification can leave individuals with fewer options than they imagined they had.
This is not a call for the abolition of checks and balances. It is a reminder that each additional dependency is both a safeguard and a potential point of failure. When systems become too concentrated, too integrated, or too politicised, the risk is that individuals find themselves caught in webs they cannot navigate or exit.
A lesson in balance
What then is the prudent course? It is not to reject the financial system. Modern economies require banks, regulators and the digital tools that connect them. But prudence also suggests keeping a portion of one’s wealth outside the reach of counterparties. Physical bullion is the oldest and simplest example.
An ounce of gold in one’s hand or in properly allocated storage has no password, no biometric scanner, and no reliance on a network that may one day fail or change its rules. It is not a substitute for modern finance, but it is an anchor, an asset that retains value when the structures above it become more elaborate and more prone to shocks.
Counsel from experience
Age teaches us that power, once centralised, is rarely devolved voluntarily. Rules introduced for good reason can expand beyond their purpose. Technologies adopted for convenience can evolve into obligations. This does not mean we must view every innovation with suspicion. But it does mean we should carry a measure of scepticism, and keep in mind that systems are not infallible.
The wisest course is balance: to use the systems we must, but to secure part of our independence outside them. Gold and silver will not solve every problem. They are not perfect assets. Yet they remain among the very few forms of wealth that cannot be deleted, suspended or rendered inaccessible by policy or programming.
In an age where safeguards proliferate yet power concentrates, that sort of simplicity has enduring value.
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