In 2018, unbanked and underbanked Americans spent $189 billion in fees and interest on financial products. Not investment returns—fees. For the privilege of participating in a system that wouldn't fully serve them.

Meanwhile, Bank of America alone has paid $88 billion in fines since 2000.¹ Financial services is the most fined industry in the world—over $347 billion in penalties across the top seven banks alone.²

The unbanked are excluded from a system with problems. The bankless opt out entirely.

The Unbanked

The number varies wildly by country—roughly 0% in Norway and Sweden, over 70% in Morocco. The US, supposedly the richest country in the world, had 22% of adults unbanked or underbanked in 2019. That's 63 million people.

Being unbanked means no interest on deposits, no stock market access, no online bill pay, no internet purchases, no credit. You're stuck with money orders and prepaid cards—slower, more expensive versions of what everyone else takes for granted.

Banking, when it works, provides genuine financial freedom. The problem is that not all banks are good, and even good ones have structural issues.

The Problems with Banking

Trust Is a Luxury

In the US, FDIC insurance covers up to $250,000—backed by the full faith and credit of the government. That's a real safety net. In developing countries, bank deposits face currency volatility, political instability, and the ever-present risk of bank runs. Trusting a bank with your savings is a luxury not everyone has.

And banks everywhere practice fractional-reserve lending. They don't hold your money. They lend it out.

How Fractional Reserve Works

When you deposit $10, the bank keeps $1 and lends out $9. That $9 gets deposited at another bank, which keeps $0.90 and lends out $8.10. Your original $10 becomes $19 in the economy, then $27, then more. This is how banks create money from nothing—or more precisely, from your deposits.

In theory, this capital creation drives economic growth. In practice, you pay fees to deposit, earn near-zero interest, and the bank profits from lending out your liquidity. And if too many people try to withdraw at once, the whole thing breaks.

The Ponzi Question

Skeptics call cryptocurrencies Ponzi schemes. Sometimes they're right. But consider how US Treasuries work:

1. Government spends all tax revenue
2. Issues Treasury bonds to keep spending
3. Old bonds come due and must be repaid with interest
4. Government issues new bonds to pay off the old ones

The SEC defines a Ponzi scheme as "an investment fraud that pays existing investors with funds collected from new investors."

The comparison isn't perfect—governments have taxing authority and can print money. But the structural similarity is hard to ignore.

The Track Record

Beyond 2008, banks have accumulated hundreds of billions in fines for various forms of misconduct. Since 2000:³

Bank	Fines Paid	Number of Fines
Bank of America	$87.9B	214
JPMorgan Chase	$40.2B	282
UBS	$32.1B	83
Wells Fargo	$27.9B	181
Citigroup	$27.1B	122
Deutsche Bank	$20.0B	59
Goldman Sachs	$17.9B	44

Total industry fines since 2000: over $347 billion across these seven institutions alone.⁴ These are the institutions we're supposed to trust with our money.

Going Bankless

Before Bitcoin, your only alternative to banking was being unbanked—with all the problems that entails. Now there's a third option.

Non-custodial wallets let anyone, anywhere, open what amounts to a private bank account on a blockchain. No application. No approval. No credit check. You download an app, write down 12 words, and you're done.

When you deposit money into a bank, you're trusting them to honor your balance, give you access when you need it, not freeze your account arbitrarily, and not go bankrupt. With a non-custodial wallet, the blockchain collectively verifies your balance. Only you—with your mnemonic phrase—can move the funds. There's no counterparty who can say no.

The Shift

For the first time in history, individuals can hold and transfer assets without permission from any institution.

The old path was: unbanked, then maybe banked if the system would have you. Now there's another option: skip the banks entirely.

This is already happening. In Africa and Southeast Asia, regions with high unbanked rates also have high blockchain adoption. People aren't waiting for banks to accept them. They're building around them.

Being unbanked means you got rejected by the system. Being bankless means you don't need it.

---

Footnotes

1. Violation Tracker, Good Jobs First. Bank of America penalty total as of January 2025. Retrieved January 2025 from Violation Tracker. ↩

2. Cumulative penalties from Violation Tracker database. The $347B figure represents only the top seven global banks—total financial sector penalties exceed $400B when including regional banks, insurance companies, and other financial institutions. ↩

3. All fine data from Violation Tracker, a database maintained by Good Jobs First that aggregates corporate misconduct penalties from government enforcement agencies. Data reflects cumulative penalties from 2000-2024. ↩

4. For context, $347B exceeds the GDP of Finland ($301B) or Chile ($301B). The violations include mortgage fraud, money laundering, sanctions violations, market manipulation, and consumer protection failures. UBS's total jumped significantly following Credit Suisse acquisition in 2023, which inherited substantial legacy penalties. ↩