Greece faces a €1.5 billion payment to the IMF expires on June 30, and to make matters worse The Eurozone portion of Greece’s €245-billion bailout expires on the same day. This huge debt and interest is totally unsustainable for Greece to maintain and Greece has no more to give. This could mean Greece exclusion from the Eurozone.
Would it be a good idea for Greece to renounce the euro and adopt bitcoin? This would mean giving up their sovereign monetary policy. However, the finance minister of Greece, Yanis Varoufakis, believes that because Bitcoin is deflationary, it would be bad for Greece.
Monetary policy, used responsibly, is useful to manage public finances, provided it is not abused to issue too much currency. Greece cannot itself use monetary policy whilst it is part of the eurozone and adopting bitcoin would position Greece in the exact same position.
Varoufakis goes on saying that bitcoin is a flawed currency because it is deflationary. And that’s where he misses the point. Bitcoin is deflationary with a fixed amount of regular issuance controlled by the bitcoin software algorithm. The amount in issue today is around 14m and the total amount that can ever be issued is capped at 21m