Scared Cyprus government issues Bitcoin warning

March 19, 2014 14:59 UTC
Angelos Votsis warns people about the risks of Bitcoin. Bitcoin’s popularity has grown tremendously in Cyprus.

Bitcoin has seen its popularity go up tremendously in the past year. Some argue that this is due to the worldwide financial crisis. This is proven when looking at specific countries that have been hit harder than others by this disaster. Cyprus being a great example of this.

Bailout deal

The mediterranean island reached headlines last year after several unusual measures were taken to eliminate the national debt. Cyprus agreed to a bailout deal that was set by the European Union. Countries that need help can ask for the EU for help but, in order to get this, are usually pushed to make drastic changes in their policy. In the case of Cyprus, the country’s second largest bank would be closed, and the country imposed a ‘bank deposit levy’ of 6.7% for all accounts under €100,000. Those over were subject to 9.9%. After this, people lost their faith in banks, turning to cryptocurrencies like Bitcoin in the process.

On Tuesday, the cypriotic government issued a new warning concerning the potential dangers associated with digital currencies. The parliament demanded to put the necessary safeguards in place to protect the public. In a joint statement, the ministries of trade and finance and the Central Bank warned that people could lose their money by investing in digital currencies like Bitcoin.

Unfounded warnings

Once again, Mt. Gox was used as a prime example to scare people away from buying Bitcoins. “There is no specific legal protection in the event of an exchange platform losing money or collapsing,” the statement said. Authorities seem to be waiting for events like this to happen so they can spread unfounded statements. As if the risk of losing money on exchanges wasn’t enough, the statement kept going. It also explained that digital currencies could be stolen by hackers while its value could fluctuate rapidly or even be wiped out. On top of that, there was a high risk of  cryptocurrencies being used in criminal activities, including money laundering.

“As a state, we ought to seek the framework of safeguarding all citizens as well as all those who trade in Bitcoin,” Kyriacos Hadjiyiannis of the Democratic Rally Party said. Meanwhile, people must be “extra careful and keep themselves informed before making their choice,” added Angelos Votsis, member of the House of Representatives.

This statement follows a series of events that took place after Cyprus’ financial meltdown. Late last year, the University of Nicosia became the first private university in the world to start accepting Bitcoin as a method of payment. Not so long ago, Neo & Bee opened up in Nicosia. Ever since, this company has partnered up with several companies, including So Easy Stores, LTV and Telemarketing.

It’s clear Bitcoin is on the rise in Cyprus. When people are hit hard by their government, they will start looking for ways to take back what they lost. In this case, we’re talking about financial freedom. The people of Cyprus have turned to Bitcoin and local merchants, heck even one of the national universities, are giving them a chance to use the cryptocurrency in everyday life. Unfounded government warnings show that authorities fear Bitcoin. Maybe if they wouldn’t have made such a mess of it all in the first place, there would be nothing to be afraid about.

@cryptomaniacs

Internet addict and virtual currency aficionado living in Belgium. I work in a school, where I am responsible for every computer and the entire network that keeps our students connected to the world. I love cryptocurrencies, mostly because it gives us a chance to take back our freedom. If we do this right, there are exciting times ahead!