Indirect Regulation

If the government regulates my conduct by law, I can make an intelligent choice about how that law applies to me. If the law is unconstitutional as applied to me, I have standing to challenge it in court. I can make an intelligent choice about the costs of breaking the law versus the costs of complying with it.

If the government wants to convict my criminally of violating that law, it has to prove every element of that offense in a court of law. I have to be found guilty by a jury. I can raise all kinds of defenses. And, importantly, the process is conduct in the light of day. If it's abusive or occurs on a mass scale, everyone knows about it. Political pressure can be brought to bear if justified.

By contrast, if the regulation is indirect, I essentially have none of these rights. There is a law that requires financial institutions to avoid facilitating money laundering. But if Union Bank closes my account because they think that's what they need to do to comply with the law, I have essentially no rights at all.

The Internet and new technologies are going to revolutionize the way we move money just as they've revolutionized the way we move information. We are at the stage now where what we do will set the path the system will follow for the future. If we build a system with oligopoly gatekeepers who control access to the system, then we will get the same violations with no due process that we get today.

If a foreign government designates someone a suspected terrorist because they speak out about how they oppress women, then it can become all but impossible for that person to open a bank account anywhere in the United States. This is because of laws that regulate financial institutions in ways that would never be constitutional if they had to apply them to individuals. You can't pass a law that says "if you're a suspected terrorist, you can't buy food" but you can pass a law that says that restaurants must use safeguards to ensure they don't sell food to terrorists and you can hold them liable if they do. But I don't think that's the future we want.

I believe it is a serious mistake to build systems that necessarily make financial institutions gatekeepers of people's access to money movement. See here for more: https://steemit.com/politics/@joelkatz/the-war-on-cash