I recently had a frustrating experience with my bank that prompted me to think about money, our perception of it, and who really “owns” it after all.

It was a fairly banal situation. I needed to pay for some car tyres at the garage down the road, but their card machine wasn’t working. The easiest alternative was to transfer the money through my banking app. As we’ll all know, there are several stages to go through when doing this: enter the transaction details, verify the recipient, confirm with two-factor authentication, and finally, after a strong warning, reconfirm. I did this and went about my day.

Later, I had a text message from the bank stating that its fraud team had flagged the transfer as a risk. There were extra security checks to go through, and I hadn’t completed these by the bank’s deadline. My online access was therefore shut down, and I ended up on the phone to a member of the team, trying to sort it out. If you’ve ever done this, you’ll know that you’re then asked various questions about the transaction and past activity on your account. It’s a process that’s clearly designed to safeguard bankers, but several questions in, I started to feel a faint unease. My bank had my money, I couldn’t get to it, and the situation was beyond my control.

Ultimately, everything was straightened out, the garage got its money, and I got my tyres. But the encounter did give me pause for thought. None of us really owns our wealth – we’re simply granted temporary access to it. And, as we’ve seen in Cyprus, this access could be taken away.

This all comes down to sovereignty. To all intents and purposes, you might own your money, your house, and your goods, but actually, this ownership only lasts for as long as the government and its agents respect your title to them. We’ve written before about inside money and outside money, and how this has affected people like Russian oligarchs, whose assets were confiscated due to the invasion of Ukraine.

Respect for an individual’s legal title to things was one of the cornerstones of the industrial age. Before this, under the mediaeval feudal system, all land belonged to the Crown and people were only granted permission to rent, manage or work on it. The economy later boomed because of the new ability to own things. People could work for their wealth, and have their land for themselves. It was a positive step that we’re still benefiting from today. That is, as long as people do respect this legal right.

Of course, the granting and removal of assets is painted to be only the extreme end of a scale (for now), but low-level “confiscation” is happening every day. Take tax, for instance. At its core, tax is legalised land grabbing (even if it is supporting civilisation). If the government taxes you at 45%, you might accept it because it’s the norm, but you’ve still lost almost half of your money. If you had £10 in your wallet, and I took £4.50, I doubt you’d be thanking me heartily for leaving the £5.50 behind. And that’s before we even get onto Quantitative Easing and inflation.

What we can see, then, is that we only really own things on a temporary licence basis. This is an uncomfortable reality, as well as being a risky situation for a business. For my business account, I have to go through the annual process of proving that I’m not a money launderer. There are various questions to answer in order to do this, and it usually goes smoothly. One year, however, I somehow answered a question wrong, and was told that my account would be closed within 30 days. I couldn’t speak to anyone, even through the bank’s chat function. Needless to say, it was stressful. It also exposed a weakness in this single point of failure: if the bank chose, it could break the entire running of a business.

This is a wider issue with sovereignty: at any point, the state could interfere. One interesting alternative to this is cryptocurrency. If you buy bitcoin, as long as you hold it yourself and not in a central agency like Coinbase, you have sovereignty over it. As we’ve discussed before, it’s decentralised “outside money”: money that lives outside a central system. It can’t be taken away, and you can have absolute confidence that it’s yours. But you do need to be careful about how you buy it, because even in this realm, governments are starting to get in on the action.

Central Bank Digital Currency (CBDC) is a government’s way of offering digital money within its own system. Just as your “real” money exists within a trust-based internal system, this would be crytocurrency that’s centralised and state-controlled. It would walk like bitcoin and quack like bitcoin, but it wouldn’t quite be the bitcoin we know. That’s because it could be subject to the same risks as any centralised currency; namely, that if the government wanted to start putting rules in place about how and where you could spend it, it absolutely could. Imagine not being allowed to buy certain goods – say a beer – on a Wednesday?

My concern is that CBDC takes all the good elements of cryptocurrency but makes it into something worse. It’s a bit like the internet and news: when the internet started sharing news, it was a wonderful, free and immediate way of accessing up-to-date stories. Yet as time went on, media moguls and social media took over, and online news changed beyond all recognition.

CBDC is already being considered by the Bank of England, as well as every other government in the world. My suggestion would be to think seriously about where you’re buying your bitcoin in the future. When it comes to sovereignty, there’s a big difference between a decentralised system (i.e. not state-controlled) and a centralised one.

As for my bank account, I’m not going to stop using it (it’s not all bad, and it clearly has its uses), but I’m not going to continue putting all my eggs in one basket. We all need to take personal responsibility for our money – we probably wouldn’t feel comfortable placing all of our assets in a single company stock, or basing our entire retirement plan on a company pension, and this is really no different.

The simplest solution to my frustration is opening a second bank account. This removes the single point of failure and gives me slightly greater control (or the illusion of it?) over my money. After all, as Henry Kissinger famously said, “Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world.”