Some Greeks Turn to Electronic Currency Bitcoin During Euro Troubles
One company is targeting Europeans with zero fees during Greek's crisis.
— -- The cash crunch in Greece may be driving some local interest in alternative currencies as one bitcoin company targets Europeans to "take control of their own wealth."
This week, there was a 35 percent increase in activity in Greece compared to average weeks for the company Coinbase, which allows people to buy and store bitcoins, the electronic currency introduced in 2009.
Based in San Francisco, Coinbase operates with banks in 24 countries with a 1 percent fee for exchanging bitcoins into the local currency and vice versa. The company announced Tuesday that it is lowering fees to zero when buying bitcoins with euros through July 5. Sending and receiving bitcoins is a free service.
People in Greece aren't able to make bank transfers after the government began limiting cash withdrawals to 60 euros earlier this week. So, activity from within Greece is "marginal" this week, a Coinbase spokesman told ABC News.
If Greeks don't already have bitcoins, it's essentially as hard to exchange for them as it is to get cash, said John Villasenor, Brookings fellow and UCLA professor of electrical engineering and public policy.
"If you’re going to take money out of a Greek bank, you could put it in a lot of places, including other traditional currencies or bitcoin," Villasenor said.
Though there may be a stronger interest in bitcoin with the limited banking services available in Greece, Villasenor urged caution toward the digital currency.
"Bitcoin is much more volatile than the dollar. That’s a big risk with bitcoin," Villasenor said. "The dollar exchange rate is unlikely to change enormously, but the exchange rates for bitcoin will bounce around more."
Coinbase has seen a roughly 300 percent increase in activity from European users in the last 48 hours, the company told ABC News.
"I personally wouldn't put it in bitcoin. I would put it in a traditional bank outside of Greece," Villasenor said.
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