Fearing return to drachma, some Greeks use bitcoin to dodge capital controls

Fri Jul 3, 2015 8:40am EDT
 
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By Jemima Kelly

LONDON (Reuters) - There is at least one legal way to get your euros out of Greece these days, to guard against the prospect that they might be devalued into drachmas: convert them into bitcoin.

Although absolute figures are hard to come by, Greek interest has surged in the online "cryptocurrency", which is out of the reach of monetary authorities and can be transferred at the touch of a smartphone screen.

New customers depositing at least 50 euros with BTCGreece, the only Greece-based bitcoin exchange, open only to Greeks, rose by 400 percent between May and June, according to its founder Thanos Marinos, who put the number at "a few thousand". The average deposit quadrupled to around 700 euros.

Using bitcoin could allow Greeks to do one of the things that capital controls were put in place this week to prevent: transfer money out of their bank accounts and, if they wish, out of the country.

"When people are trying to move money out of the country and the state is stopping that from taking place, bitcoin is the only way to move any value," said Adam Vaziri, a board member of the UK Digital Currency Association.

"There aren't any other options unless you buy diamonds, and that's very difficult to move."

But Marinos said the bitcoin buyers' main aim was to shield their money against the prospect that Greece might leave the euro zone and convert all the deposits in Greek banks into a greatly devalued national currency. If voters reject the demands of international creditors in a referendum on Sunday, this becomes much more likely.

"A lot of people are keeping all the bitcoins they buy on our platform, until they understand what to do with them," Marinos said. "In their eyes, now they have bitcoins, they're safe."   Continued...

 
A man demonstrates the use of a Bitcoin ATM at a bookstore in Acharnai in northern Athens, Greece June 30, 2015. REUTERS/Dimitris Michalakis