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Euro Fears Boost Rush to Online Virtual Currency Bitcoin

Euro Fears Boost Rush to Online Virtual Currency Bitcoin

More Bitcoin posts at bottom of article
John Greenwood Last Updated: Jun 12, 2012 8:02 AM ET

The bad news out of Europe is benefitting safe haven countries, pushing down borrowing costs for a whole swath of governments. On May 30 the yield on the benchmark 10-year U.S. Treasury slipped to 1.6%, the lowest since the Second World War.

Fearful of the future, Europeans are moving their money out of their banks and dumping it into safe havens such as U.S. Treasuries, Government of Canada bonds — and apparently the virtual currency Bitcoin.

‘We’re getting requests from people saying, can we mail you euros? We can’t do that legally, but they keep asking’
“European volume has been skyrocketing,” said Charlie Shrem, chief executive of BitInstant LLC, a company in New York that enables clients to transfer funds between Bitcoin and U.S. and Canadian dollars, British pounds, euros and other major currencies.

According to Mr. Shrem, the sudden rise has been driven by people in countries like Greece, Italy, Spain — and even the Netherlands — anxious to protect their savings.

“We’re getting requests from people literally saying, can we mail you euros? We can’t do that legally, but they keep asking.”

The bad news out of Europe is benefitting safe haven countries, pushing down borrowing costs for a whole swath of governments. On May 30 the yield on the benchmark 10-year U.S. Treasury slipped to 1.6%, the lowest since the Second World War. Ten-year bond yields in Germany, France and Canada have all hit record lows in recent weeks. Even the U.K. is getting a lift.

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Competing Currencies

I like this because it promotes alternative currencies and competition. However, I would be worried if a government decided to institute a "virtual" currency, because it gives them unprecedented power over the economy.

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