Crypto in Greece and the Financial Crisis: Lessons Learned

Following the 2008 global financial crisis, a new trading system emerged that utilized cryptographically-produced digital currencies. These currencies took the world by storm, including the nation of Greece. In fact, it was the financial crisis of Greece that led to people embracing these virtual currencies. 

But how did crypto Greece end up here? To understand that, we’ll have to look at the evolution of the Greek economy. 

A brief look into the financial crisis of Greece

To understand the prosperity of crypto Greece, you first have to understand the background of Greece’s economic crisis. After WWII, European countries came together to form the European Union (EU). Once unified, they decided to create one single coin – the EURO – for ease of trade. 

Greece joined the EU in 1989 and adopted the Euro in 2001, leaving its fiat drachma behind. However, Greece brought along its bad financial governance and poor country management. In Greece, most people had a habit of not paying taxes. With all its debt, Greece suffered heavily under the 2008 recession. 

Post the 2008 crisis, Greece took out new loans to pay off old debt and got a good response from lenders as Greece was a part of the EU. Lenders assumed that the EU central bank would pay them even if Greece failed to do so. 

For a long time, the EU refused to help Greece. Eventually, Greece agreed to imposing austerity measures, an unpopular method of controlling fiscal deficit that comes with rigid restrictions. Following this, Greece was left with increased poverty, debt and high-interest rates. 

In 2015, banks closed, and ATMs became inoperable, with people’s money locked in. There was no money, no food, no jobs. The debt was an unfixable mistake that was a result of poor governance policies. Greece’s centralized governance led to the crisis of accumulating huge debt and eventual economic collapse.

“Greece’s economic crisis is a demonstration of failure of central banking” — commented Greek Cryptocurrency expert Andreas Antonopoulos.

During this period of Greece’s economic crisis and uncertainty, the crypto Greece economy emerged.

Crypto in Greece

It is essential to establish that Bitcoin was not the outcome of the financial crisis of Greece. Bitcoin had been in the works for long and was a product of the technological evolution that started decades ago. The timing of Bitcoin’s emergence was indeed exceptional amidst the financial crisis of Greece which only accelerated the embrace of crypto in Greece. In 2009, Bitcoin made its first fully functional appearance.

Source: Pexel | Many Greeks took refuge in bitcoin during the financial crisis of Greece. 
Source: Pexel | Many Greeks took refuge in bitcoin during the financial crisis of Greece. 

The goal was to create a decentralized currency that was not controlled by financial institutions, regulators, or sovereign states. Bitcoin was created to provide an alternative payment system to traditional authorities like governments and banks, which were considered untrustworthy by virtue of the financial crises and they were infamous for charging high transaction fees. With this alternative trading method, crypto Greece garnered the attention of businesses and consumers alike at a rapid pace.

Reaction to crypto in Greece amidst Greece’s economic crisis

The Greeks had lost confidence in financial institutions, central governments, and capital controls. People started using bitcoins for cross-border fund transfers and general payments. Many restaurants and stores in Athens began accepting bitcoins  with the help of a Greek Bitcoin exchange that emerged back then.

A CNBC article published in June 2015 regarding crypto in Greece reads:

“Bitcoin traded at more than $255 on Monday afternoon, according to CoinDesk’s Bitcoin Price Index—up from about $223 on June 7. In fact, that’s approaching the cryptocurrency’s three-month high of about $261, and it’s all thanks to Greece, according to traders and Bitcoin experts.”

Lessons learned about crypto Greece during the financial crisis 

Crypto in Greece was light at the end of the tunnel. While crypto Greece did not solve the bigger financial crisis, it heralded a new beginning. 

Here are some of the lessons regarding crypto Greece, learned during the economic crisis- 

Crypto as an alternative to traditional banking

Cryptocurrency offered decentralization – a system free of governmental ties, which, for obvious reasons, appealed to the Greek people. At a time when people were dissatisfied with central banks as banks had breached their trust, crypto in Greece offered them what they were looking for.

Transparency and security

Bitcoin was designed based on blockchain technology offering decentralization, meaning that the currency users would not need to repose their trust in a central authority. The transactions offered transparency and security to users. 

Economic sovereignty

During Greece’s economic crisis, sometimes the banks remained closed, with the ATMS having limited withdrawals. Crypto Greece provided individuals with fast and easy transactions, transparency and control over their assets. At the time, Bitcoin ATMs came up on the streets, and people turned to them.

Financial inclusion

Cryptocurrencies facilitated low-cost international remittances, which were crucial for families affected by Greece’s economic crisis. This feature also helped in the rise of Bitcoin.

Is cryptocurrency a foolproof solution to a financial crisis?

Greece’s economic crisis and the consequent crypto Greece popularity proved that cryptocurrencies belonged in the modern landscape, providing a solid alternative to traditional finance without meddling from central authorities that stirred up a crisis in 2008. 

As central governments around the world increasingly understand and regulate crypto, the asset class has historically proven itself to stand crises as grand on scale as the 2008 global financial crisis and the 2020-21 Covid pandemic. Which is why now is as good a time as any to get started with crypto in Greece and any corner of the world in general! Millionero, a crypto exchange active in Europe, Asia, and the Middle East, can be the simplest platform for crypto beginners! 

Get educated, stay updated, and trade smart with Millionero! Visit our blog for insights into the crypto market and more!

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