Paraguay banking crisis: 3 million people locked out of their accounts. This is exactly why self-custody matters - when traditional banking infrastructure fails, you can't even access your own funds. No withdrawal permissions, no transfers, just frozen assets at the mercy of centralized systems.

The technical reality: centralized databases with single points of failure. One regulatory freeze or liquidity crisis and the entire user base gets cut off. Meanwhile, crypto wallets give you direct control via private keys - your funds stay accessible regardless of institutional problems.

This isn't theoretical anymore. Real-world bank runs demonstrate the fragility of custodial finance. The Paraguay situation shows how quickly 'your money' becomes 'their decision' when you don't control the keys.