Online Bitcoin transactions have surged since the Greek government imposed capital controls and withdrawal limits. In the midst of the Euro crisis, people across the world are finding Bitcoin to be a safe and attractive bet in comparison to fiat currency.
Gone are the glory days of Greece – the land of Iliad and Odyssey. Once a great empire from 500 BC to 200 BC, the present day Greece lies in tatters due to deteriorating economy and rising debt. The country which went broke due to the economic crisis is now unable to repay the debt it owes to the International Monetary Fund, European Central Bank and Eurozone.
Upon becoming a member of the European Union, Greece adopted the euro as its currency and the country has been in trouble ever since. According to the mainstream media the European Union was the biggest failure, thanks to mismanagement and time spent by the leaders of EU nations traveling back and forth to Brussels instead of concentrating on the governance and development of their countries. One look at the present day EU shows a crisis – Spain and Italy in red and Greece in crimson.
Greece has been struggling for almost a decade now. The bailout packages provided by troika didn’t really help the country much. Both Greece for its failure to reform its economy and Troika’s conditions for the bailout package are equally responsible for the country’s present condition.
In order to prevent total collapse of the country’s economy, Greece recently introduced capital controls and imposed limits on the maximum cash withdrawal from banks. Greeks can currently withdraw only 60 euros per day from their bank accounts. The state of affairs in the Mediterranean nation has started to take its toll on normal transactions, both online and offline. Banks have always been the backbone of the economy, the limits imposed on transactions has crippled online transactions and payment services alike.
PayPal’s services in Greece now stands severely disrupted due to the inability of Greek customers to transfer funds into PayPal wallets linked to their bank accounts. Currently PayPal’s Greek customers can only receive payments in the region. Even cross border money transfer facilities have been temporarily discontinued by PayPal in Greece. Other online payment services, including card payments and wire transfers are also affected by transaction limits.
Issues related to increased dependency on conventional banking services has become clearly visible during this time of crisis, which has strengthened the principles associated with Bitcoin. There is speculation that Greece may adopt Bitcoin as an alternative currency in the coming days, but the Greek government’s negotiations with Troika says otherwise. Greece is still inclined to be part of the EU and it is holding a referendum with this regard.
Greece may continue to use euro as its official currency, provided both the parties come to an understanding in the coming days. Otherwise, it may switch to drachma, the national legal tender of Greece before it joined EU. However, once the capital controls are eased, Bitcoin may become part of an alternative economy in the region as Greeks will be willing to reduce their dependency on the country’s financial institutions.