The overnight implementation of capital controls in Greece, as the government looks set to default on its IMF loan repayment, has led citizens to explore other methods for moving their savings out of the country.
The Greek government announced on June 28 that banks in the Mediterranean country would remain closed for the next week. The government also imposed capital controls to prevent the flight of money internationally. Let’s look at some of the ways Greeks may be able to exchange their funds for bitcoin, before the expected default on the repayment of the IMF loan on June 30.
The BBC news service explains what these capital controls mean for those trying to live day-to-day in Greece, including a 60 euro limit on daily ATM withdrawals, and a ban on overseas money transfer, except for important business transactions. The BBC defined these as follows:
- A maximum of €60 (£42; $66) can be withdrawn from an account in one day
- Overseas transfers of cash prohibited, except for vital, pre-approved commercial transactions.
Additional unconfirmed reports suggest that up 40% of Greek ATMs may already have been emptied of their supply of euros by concerned savers, leaving those in smaller towns and villages without a method to withdraw cash.
The prevention of overseas transfers means that Greek citizens are also finding themselves unable to digitally transfer their savings abroad to contacts in either Europe or the rest of the world where the funds may be better protected.
The controls on fund transfers also extends to Western Union, which confirmed on June 29 that their Greek arm of the business would also be closed for the rest of the week.
Western Union to close in Greece for rest of week t.co/f7j1RzpRHA— Reuters Business (@ReutersBiz) June 29, 2015
With traditional bank transfers and well-known options such as Western Union out of the picture, we spoke to Kevin Rinta, vice executive officer at Exmo.com about how the Spanish-based digital currency exchange was experiencing the Greek crisis.
We asked Rinta if there had been any increase in the number of Greek users seeking to move their savings out of the country via bitcoin. The VEO explained there hadn't been a distinct rise. He said:
“The percentage of European citizens registered on our platform is quite large and growing. Naturally, Greece is included in this growing demographic.”
Rinta went on to describe why he believed there wasn't a large upswing in the number of Greek citizens specifically trying to purchase digital currencies as a way to move money abroad. He said:
“[T]he problem here is foresight. If the banks are already closed, then people can't access their money to purchase bitcoin. However, those people who saw the writing on the wall and were prepared could have converted their euros into bitcoin and held them until this crisis blew over. Let this be a lesson to other people living in other countries struggling within the European Union.”
We asked Rinta what alternative methods through which customers in the country could still use Exmo's platform to purchase digital currencies without using the SEPA bank payment system that is now blocked in Greece. The question that has been popular on Reddit's /r/bitcoin. He said:
“It is very easy. Customers can use any of the following payment systems: Perfect Money, AstroPay, Payeer, Ok Pay, Qiwi and Yandex Money.”
In January, Cointelegraph predicted that the worsening financial climate in Greece could lead to monetary controls. A similar situation has been present in Ukraine since March, when the rate of hyperinflation reached 272%. The government there also acted to prevent citizens from moving funds abroad when it limitied their ability to buy foreign currency through the country's banks.