Friday, January 27, 2023

Greece Reveals Plans to Declare Bitcoin a National Currency Amid Economic Turmoil

Greece Reveals Plans to Declare Bitcoin a National Currency Amid Economic Turmoil

Overcoming the threat of regulation by government is seen by many as the “final battle” in the emergence of Bitcoin. And in the face of an ongoing independence movement in Catalonia, it has come to light that in 2015 Greece’s Syriza coalition seriously considered using Bitcoin as an option to thwart suffocating austerity measures unilaterally imposed upon them by the EU.

Also read: Lawyer Daniel Kelman Takes on Peter Vessens for Mt Gox Victims

Greece Seriously Considered Using Bitcoin During the Grexit Drama

At the time, Greece was suffering under a crippling debt burden, depression-like loss of economic growth, sky high unemployment rates, and an outflow of human capital from the country.

National elections placed the Syriza left wing party in power, led by the young politician Alex Tsipras, who recruited Yanis Varoufakis as his finance minister. Tsipras tasked Varoufakis with extricating their country from the clutches of an incumbent system that threatened to crush them economically and socially.

Throughout the “Grexit” negotiations, EU bureaucrats continued to strong-arm the Greek delegation, insisting on implementing further austerity. Varoufakis has noted that a plan was agreed to with China that would have seen ongoing investment into the country, a financial lifeline. The plan, however, was scuttled by the EU. Backed into a corner, the Greeks also considered taking extreme measures.

Greece Bitcoin
Economic turmoil in 2015 led to a major movement to remove Greek from the European Union

Eva Kaili, a Greek MP at the time, recounted that the government seriously considered Bitcoin as an option:

“We talked about leaving the Eurozone, finding another currency. . .There was even a ‘Plan B’, which involved essentially hacking into everyone’s accounts and replacing all their money with Bitcoin.”

Bitcoin as a Real Political Tool

This is a startling admission and highlights the increasing geopolitical importance of Bitcoin as a tool. It serves to show that Bitcoin does not threaten all forms of government, but simply the ones seeking to maintain their own power and the system under which they control.

The irony of the Greek situation was that as an April Fools joke in 2015, it was reported that Varoufakis had plans to go nuclear in the political battle by backing Greece with Bitcoin. One of the made up quotes attributed to him seems remarkably prescient a few short years later:

We‘ll go to Bitcoin, we will be ahead of all the world economies and although it may be painful in the beginning, Greece’s economy will thrive in the long term.”

Now it emerges that this joke was closer to the truth than the world knew. Becoming a Bitcoin economy would have had large ramifications for Greece and Bitcoin alike.

It is possible that Bitcoin was not ready for that level of exposure, nor the attacks it would have face. However, it is also notable, that all else being equal, if Greece had started using Bitcoin for even the single purpose of holding reserves, then they would have profited by thousands of percent, perhaps paying down much of their debt.

A Sign of Things to Come?

The current example in 2017 is that of Catalonia, the richest region in Spain, which has today declared independence from the Spanish state. The region voted on its independence and Madrid responded thuggishly, brutalizing voters and jailing independence leaders under the guise of sedition. This has sparked memories of the fascist Franco regime.

The theme of independence has been resurgent in recent years as inequality and the economic infeasibility of the current system becomes more apparent to larger clusters of informed citizens.

One country looking to capitalize on this is Estonia. They have introduced an e-residency program that allows companies to incorporate in the country and access banking services, whilst never actually residing within its borders. Additionally, reports of Estonia creating an “est-coin” as a national currency have surfaced.

However, the sentiment from those in control of the current system is clear: you shall not seek independence from the system that crushes you. Or as ECB head Mario Draghi said regarding a possible est-coin, “No member state can introduce its own currency; the currency of the eurozone is the euro.”

The revelation from Greece, though, shows that EU members may not have as much loyalty to the euro as the ECB expects.

What do you think about Greece’s consideration of using Bitcoin as a national currency? Share your thoughts in the comments below.

Images via Yiannis Liakos/AP, Alexandros Avramidis/Reuters

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