With the Greek debt crisis still far from over, Prime Minister Alex Tsipras is now considering alternatives to shifting back to a potentially worthless drachma. Bitcoin has been on the rise, thanks to capital controls imposed in the country, leading the Greek leader to consider digital currency solutions.
The Greek referendum has resulted in an overwhelming vote against additional austerity, which means that the country could forego the much-needed bailout and be forced out of the euro zone. However, it might be thrown deeper into depression and skyrocketing unemployment in that case.
Digital Currency Alternative
Greece is stuck between a rock and a hard place, but it appears that it might be better off staying in the euro zone. “Greeks have seen their living standards cut, unemployment is running at 26 percent, youth unemployment is over 50 percent and they’re about to face an even bigger depression,” mentioned former senior executive of PIMCO Mohamed El-Erian.
With that, Tsipras suggested that the Greek government could issue their own digital currency that might have more value in case the country can no longer use the euro. “What Greece needs, is to adopt a global digital currency that is built with trust and integrity for everybody worldwide, so that anyone may participate regardless of financial or economic standing,” explained DNotes founder Alan Yong.
“If Greece chooses to return to a national currency like the drachma, or government backed digital currency, it is unlikely that currency would have much value outside of Greece. Greek citizens will fear that the new currency will be worth much less than their current eurodeposits, and this will be counter-productive to preventing further bank runs. I believe that a digital currency that has its value set globally is the solution; a currency that remains stable regardless of local political turmoil,” he added.