Whilst the developments in Cyprus are both equally appalling and frightening - especially when you consider it may well be seen as a test bed for intervention measures by the 'Troika' made up of the European Union, the IMF and the European Central Bank - it does make for fascinating reading.
Of particular interest is the recent reports that many Cypriot residents are turning to the virtual currency BitCoin as a safe harbour for their money at a time when massive restrictions on the movement of money and savings have been put in place. Withdrawals have been limited to several hundred Euros per day and movement of capital out of the country has been curtailed and recent reports suggest those with savings in excess of Eu100,000 stand to lose up to 60% of their hard-earned nest eggs.
BitCoin, seen by many as little more than a financial sideshow (a $964million market compared to the $4trillion traded each day in hard cash) and one that is vulnerable to hacking or dilution. It is also completely unregulated yet many are turning to it in response to restrictions (such as those in Cyprus) and in countries that anticipate a similar impact in the coming months (Greece, Spain etc.). As a result, the value of BitCoin as rocketed (see graph) and increased the media exposure of this peer-to-peer system that eliminates the 'bank' as the intermediary in the transfer or storage of money.
In our connected world, this can only be a good thing as it will surely help establish BitCoin as a legitimate player in the financial world and ensure that what can often seem to be archaic financial systems begin to move at internet speed and in a more sustainable way...
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