ATHENS — Greeks are converting their euros to bitcoins as a safeguard against a return to devalued drachma in the event of a 'No' vote in a referendum, due today (Sunday). Although absolute figures are not known, Greek interest in online "cryptocurrency" has surged in recent weeks. Bitcoins are out of the reach of monetary authorities and can be transferred at the touch of a smartphone screen. New customers depositing at least €50 with BTCGreece, the only Greece-based bitcoin exchange and open only to Greeks, increased 400 percent between May and June, according to exchange founder Thanos Marinos. The average deposit had increased four times to around €700. With bitcoin, Greeks would be able to beat the capital controls put in place this week to prevent transfer of money out of their bank accounts and, if they wished, out of the country. First Post reported Adam Vaziri, a board member of the UK Digital Currency Association, saying that 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. "There aren't any other options unless you buy diamonds, and that's very difficult to move," Vaziri added. According to media reports, Greek interests in the cryptocurrency increased, after the country imposed capital controls, limiting cash withdrawals to €60 (£43, $67) a day. Marinos told CoinTelegraph in an interview that the number of customers newly registered with the exchange had increased by 600 percent. "People are in shock as they never expected to have closed banks and at the same time risking being out of eurozone and euro currency soon," he said. A 'No' vote in the referendum would cause Greece's exit from the eurozone and if that happened, the Greeks would have to convert all their banks deposits into a greatly devalued national currency. Digital currencies such as bitcoin are unregulated unlike other currencies and are transferred over a peer-to-peer network without the help of intermediaries, which makes it easy for people to invest in bitcoin without any restrictions. While polls in Greece show the country evenly divided going into Sunday's crucial bailout referendum, some of the world's top economists are united in arguing that a ‘No' result is the country's best – or least-worst – choice. Joseph Stiglitz, a Nobel laureate in economics and professor at Columbia University in the United States, this week wrote that voting ‘Yes' for the conditions tied to the bailout or ‘No' both carry “huge risks”. But “a no vote would at least open the possibility that Greece... might grasp its destiny in its own hands” and shape a future that “though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present,” he said. Paul Krugman, another Nobel winner, who writes for The New York Times, agreed. A ‘No' result may force Greece to exit the euro, “which would be hugely disruptive in the short run. But it will also offer Greece itself a chance for real recovery.” Thomas Piketty, a highly respected French economist who wrote the influential “Capital in the 21st Century”, told French television network BFMTV that Greek voters would be right to reject the bailout offer put to them in the referendum. “For me, it's clear: it's a bad plan,” he said. He added, though, that he understood many Greeks were afraid of a “violent” shock if it led to expulsion from the euro. For them, and other economists, Greece's debt burden – 323 billion euros ($359 billion) – is clearly unsustainable and needs to be reduced. Several of them said Greece's current radical left government, which is arguing for a ‘No' result, was not blameless for the worsening mess the country was now in. But they believed Greece would be better off rejecting the bailout deal as it stands. An open letter by 246 Greek economic professors, though, begged to differ. They wrote that “we strongly believe that, at this crucial point, it is of paramount importance... to preserve our position in the eurozone and the EU”. “We believe that the recessionary consequences of debt default and exit from the eurozone... will be much worse than the effects of a painful compromise with our EU partners and the IMF (International Monetary Fund),” they said. “A disorderly break of our country from the core of Europe will have disastrous economic, social, political and geopolitical consequences.” — SG/Agencies
