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The rapid depreciation of the British Pound has resulted in Forex companies like Thomas Cook imposing restrictions on the sale of foreign currencies.
The rapid depreciation of the British Pound has resulted in Forex companies like Thomas Cook imposing restrictions on the sale of foreign currencies. Bitcoin offers a better way out for ordinary residents.
For the common man, there is little he can do if his currency is subject to sudden depreciation. With the pound hitting a historical low, the British can only watch passively as their sterling-denominated assets lose value. The price of imported goods (like oil) and goods benchmarked to international markets (like gold) will increase in GBP terms. If they want to avoid incurring losses, they will have to sell their pounds for either gold or foreign currencies like the Euro or the US dollar.
A spokesperson for Thomas Cook, Britain's biggest travel operator, said
“We have temporarily suspended our travel money website following unprecedented customer demand for foreign currency overnight and this morning. Our immediate priority is to ensure that we have enough currency in store to fulfill outstanding orders."
Thomas Cook is not the only currency exchange to have suspended selling foreign currencies for the pound. According to CNN, Australia's Commerce Bank, too, had suspended the exchange of pounds for foreign currencies by individual customers.
While the pound sterling is supposed to be one of the most liquid currencies in the world, individual customers were still denied access to move out of the pound when they needed it the most. Most institutional investors use automated programs to take positions on unfolding events and were able to execute trades quickly. Some hedge funds took a call on Brexit and shorted the pound beforehand, generating large profits when Brexit occurred and the pound depreciated.
Bitcoin provides one of the few means available to the common man to quickly convert his pounds to alternate assets. According to Bloomberg, the volume of Bitcoin trades at Kraken (the world's largest Bitcoin exchange in Euro volume) has doubled. From Nigeria to Venezuela, Bitcoin has the ability to give ordinary residents a quick way to escape rapid currency depreciation.
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