On 10 July 2015, Greece’s daily ATM withdrawal limit was €60 a day, so if that was the case, how was it possible that on 3 July 2015, a very diligent Joaquin Fenoy wandered the streets of Athens, easing the currency limitations through installing ATMs with a withdrawal limit of €1000 a day? That is a whole €940 above the limit the Greek government has put in place in order to prevent a run on the banks, whilst Greece’s creditors decided on a financial fate for Greece.
The answer lies in the six year-old, virtual currency, Bitcoin, which has seen its usage rate grow by an incredible 500% in Greece, in the preceding four weeks. Fenoy, is the CTO of four month old, Barcelona-based start-up, Bitchain, a company launched in March in order to build an international network of Bitcoin-based ATMs. BTCPoint, a Barcelona/Silicon valley company, manufactures these ATMs.
The ATMs work by allowing users to insert money in them and in return, the equivalent amount of Bitcoins will be deposited into their virtual wallet. To convert Bitcoins into cash, which is the most likely transaction in cash-strapped Greece right now, a user will send Bitcoins to a virtual address the ATM supplies them with. They are then given a QR code that they scan to receive cash. The Bitchain ATMs charge 4% commission on transactions, which is a little bit below the worldwide average of 5,61%, according to the industry site, Coin ATM Radar and the ATM just erected in Athens will offer zero commission rate, initially. Sending money the traditional way is a great deal more expensive than this as a transfer from the U.S to Greece usually sees the Western Union taking a big cut of the conversion.
Bitcoin has no ties to any government financial systems and it appeals to people looking to hedge against unstable currencies and banking systems. The demand for the currency has picked up drastically, especially in Europe, where it is speculated that Greece’s struggles have inspired Southern European nations to shift to Bitcoin, incase their countries ever find themselves facing similar problems.
Bitchain plans to erect forty more ATMs like this, worldwide, by the end of the year, especially in countries facing similar currency problems and stringent transfer regulations such as Argentina and Venezuela. Bitchain predicts that they will also see a growth in popularity of their ATMs should Greece exit the Euro, as Bitcoin is not much stranger than the alternatives being experimented with in Greece right now. Some of the stores in Greece are accepting their neighbour, Bulgaria’s currency, the lev, whilst Greek island Agistri, has tried out the gold-backed, digital currency, Nautiluscoin.