[Alberta's Child]

My understanding is that local banking concerns are only an issue when you're dealing with a large sum of money, with brokerage accounts, or both.

I also wonder if a U.S. citizen who conducts business with a foreign bank using only the currency of that nation has the same problem.

[SES1066]

My understanding is that local banking concerns are only an issue when you're dealing with a large sum of money, with brokerage accounts, or both.
I also wonder if a U.S. citizen who conducts business with a foreign bank using only the currency of that nation has the same problem.

The problem is that the 'local banking concerns' have a reporting obligation to a foreign tax authority, the IRS, regardless of the size of the depositor. It is a regulatory burden to them and unless they are already setup to handle it, they take the easier path of rejecting the account. As for deposits in local currency, it is the depositor, who is required to identify themselves by citizenship when opening the account, that is the problem. Sure, one can claim local address but almost every nation makes it a crime to hide national status.

[aMorePerfectUnion]

“I think it safer to say Mormons are not mainstream Christians. Belief in the Trinity is not a condition for salvation and scriptural support for the Trinity is not as strong as many assume it to be.”

If the aggregate amount of offshore accounts equals 10k or more, you must report, regardless of currency. Only physical property is exempt from reporting, if not part of a financial account.

[RBroadfoot]

The big problem is precisely that Americans who want to open a simple, personal checking account in local currency cannot do so.

IRS has made doing so prohibitively expensive for any reputable foreign bank with FATCA. Such banks simply cannot afford to do business with Americans unless the balances are in seven figures.