Hong Kong Chief Executive Carrie Lam says she is currently unbanked and keeps piles of cash stashed at her home courtesy of US sanctions. Alongside 14 Chinese and Hong Kong officials, Lam has been slapped with punitive measures that effectively cut her off from the banking system. The US government announced the sanctions in response to the imposition of the national security law on the Hong Kong territory.
The US government, through the Office of Foreign Asset Control, can effectively enforce its policy objectives on non-US entities via the threat of punitive fines for defiant financial institutions. According to one report, it is this risk of running afoul of US policies that stops even mainland Chinese banks from extending services to the Hong Kong chief.
Lam, who reportedly earns an annual salary of $672,000, narrated her unusual predicament during a television interview. She said:
Sitting in front of you is a chief executive [of Hong Kong] who has no banking services made available to her. I’m using cash every day, for all the things. I have piles of cash at home. The government is paying me cash for my salary because I don’t have a bank account.
To make matters worse for Lam, Chinese state-owned banks have reportedly joined their international counterparts in denying her access to banking services. For their part, authorities in mainland China have since retaliated by promulgating national security laws that ban banks operating in the country from “colluding with a foreign government to impose sanctions on Hong Kong.”
Despite facing this seeming conundrum, the report goes on to say that financial institutions are more inclined to comply with US sanction laws due to “the primacy of the US dollar in the Swift global cross-border financial transaction system.”
The Crypto Alternative
Meanwhile, for Lam and the 14 officials that are in a similar predicament, this potentially means they will remain excluded from the financial system into foreseeable future unless they make the switch to an alternative financial system. With cryptocurrencies, Lam who says she was “unjustifiably sanctioned by the US government” or Bernard Chan, one of the Hong Kong chief’s advisers who has reportedly been labelled a “politically exposed person”, can access an alternative financial system that cannot be censored.
The Hong Kong CEO, who has already exposed herself to a risk of break-in, also could convert the piles of cash stashed at her house into bitcoin or bitcoin cash. When she wishes to cash out, there are 60 ATMs that are installed at different locations in the city, according to Coinatmradar. The ATMs support several coins including BTC and BCH.
For Bernard Chan, who confirms that his bank account was frozen and that Hong Kong officials in the city are struggling to open bank accounts, cryptocurrencies would be a practical solution.
What are your thoughts on the Hong Kong chief’s situation? Tell us what you think in the comments section.
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