When Crossing the Italian Border, Take When Crossing the Italian Border, Take Crypto, Not Cash, Not Cash

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Giovanni de’ Medici was born with very little to his name, but by the time he died, he was one of the wealthiest men in Florence. As the founder of the first Medici bank, he set the foundation for a banking dynasty that would put Italy at the center of European finance for centuries.

During their tenure, Medici bankers pioneered new methods of accounting, brought a tremendous influx of wealth to the country, and established the florin as the de facto reserve currency for the whole of the European continent.

The financial and commercial success that resulted helped spur the Renaissance, bringing about great advancement in all areas of art, science, and intellectual thought.

Today, Italy’s story is quite different. Tourists no longer visit to see present-day prosperity. Instead, they visit to see the ruined remains of these once prosperous times. Italy’s banks are no different. Once some of the most advanced and respected institutions, their former prestige is now but a distant memory.

The Italian banking system is in full-blown crisis. Capital flight has already begun, and the authorities are trying to stem the flow with capital controls.

I had a chance to see this first-hand last week when I visited Milan to meet up with Horizen CEO Rob Viglione and a few of Horizen’s superstar software engineers to strategize about some exciting new projects.

When crossing the border to leave Italy however, I saw just how desperate the Italian government has become. You’ll be surprised to hear what they’re doing, but it will underscore why you should own crypto.

Next Stop, Switzerland

During the visit, I decided to take a day trip to Basel, Switzerland, to visit some family friends. Little did I know that traveling alone across the border would put me in the crosshairs of the Italian border officials.

On the last stop between Italy and Switzerland, three very intimidating, armed customs officials entered the train. They were looking for men between the ages of 30 and 50, traveling alone in first class, clean cut and dressed professionally. Apparently, this is the profile of someone smuggling gold or cash across the Italian border.

Unfortunately, I fit the profile perfectly. And being a lawyer from Panama certainly didn’t help.

They approached me and began asking questions.

“What’s your profession?”

“Where do you live?”

When I answered “lawyer” and “Panama” their eyes grew big. They were sure they’d hit the jackpot.

(Spoiler alert: I don’t travel with cash for exactly that reason.)

Immediately they began with an intense search of me and my possessions, including a full body pat-down. They emptied all of my pockets, opened all of my bags, and even removed the interior lining of my carry on (which took a good hour to fix).

Then they proceeded to search every item in my wallet, taking out and inspecting each piece of paper. They even searched the trash can by my seat and made the poor man sitting across from me open his sandwich to show he wasn’t hiding anything under the lettuce.

And you thought airports were bad….

What Were They Looking For And Why?

One of the most convenient excuses for authorities to rifle through your possessions and confiscate assets is in the name of fighting terrorism and money laundering. They’d like you to believe that if you have nothing to hide, you have nothing to fear! And certainly, if you were to ask the Italian government why they’re searching people at the border they’d give you some similar response.

However, the plain truth is that Italy is broke and looking to confiscate cash and gold before it leaves the country.

Italy’s economy has been tanking for years, but right now all eyes are on their crumbling banking system, which is set to blow. A massive credit contraction has already begun and if you believe the economic pundits a crash is likely.

If the economy doesn’t turn around soon, the EU may force Italy to take economic austerity measures, which would cause a major rift between the EU and the Italian government.

So far, the headline figures don’t look good at all. Italy’s budget deficit for 2019 looks to be 3.5% of GDP, which is significantly higher than the proposed 2.4% that Brussels had previously claimed was unacceptably high.

It’s looking more likely that Italy will be forced to either default on its massive debt burden or face a massive banking crisis. Either of which would be disastrous for the average Italian citizen.

That’s why a number of Italians are trying to get their money out now before it’s too late.

Since the financial crisis, many Italians realize that their money is not safe in Italian banks. They know that government regulators can impose Cyprus-style capital controls overnight, imposing significant limits on withdrawals and transfers.

What Does this Mean for Crypto Law Insiders?

Many governments across Europe are broke and scrambling to stay afloat. We wrote about some of the desperate tactics being taken by the Spanish government, and we’re seeing similar moves made by Italy here.

But Italians aren’t stupid. They’re trying to get their wealth out of the country before it’s too late. And the Italian government is doing its best to stop them.

For Insiders, this situation should serve as a reminder as to why many governments don’t like crypto. Crypto is borderless. It can’t be easily confiscated. It can be transferred to anyone, anywhere at any time. Your financial freedom represents a threat to government regulators because they cannot implement capital controls effectively. Satoshi knew this when he created Bitcoin and it was a major ideological motive behind its creation.

Even if you don’t live in Italy or any other broke nation on the verge of an economic meltdown (Argentina, I’m looking at you) you would still be wise to hold some of your wealth in crypto. It’s a good Plan B in case things go wrong at home. You never know when you might wake up to find your bank account frozen.

And if you’re leaving Italy by train, be sure to take crypto not cash.

Dean Steinbeck

Dean Steinbeck

Dean Steinbeck, Managing Director of Crypto Law Insider, is the leading authority on legal issues related to cryptocurrency and blockchain technologies.
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