New Details Emerge About Greek Plan for Parallel Payment System and Varoufakis’ Resignation

Bitcoin Magazine
New Details Emerge About Greek Plan for Parallel Payment System and Varoufakis’ Resignation
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Earlier in July, Bitcoin Magazine reported that former Greek finance minister Yanis Varoufakis, who resigned after the Greek referendum on July 5, expressed his disappointment with the outcome of the Greek crisis.

Now Kathimerini, a New York Times-branded daily newspaper published in Athens and distributed with the International New York Times in Greece and Cyprus, reveals that Varoufakis was authorized by Greece’s Prime Minister Alexis Tsipras last December to look into a parallel payment system that could eventually work as a parallel banking system.

Before becoming Finance Minister, Varoufakis proposed a parallel IOU-based currency, dubbed Future Tax Coin (FT-Coin), similar to a cryptocurrency in some aspects. Varoufakis is not impressed by bitcoin as a currency, but he is persuaded that its underlying technology could be put to effective use in troubled economies.

In a teleconference call with international financial operators, Varoufakis claimed to have been given the OK by Tsipras to plan a payment system that could operate in euros but which could be changed into drachmas “overnight” if necessary, according to Kathimerini ‘s interpretation. Kathimerini obtained a transcript of the call, which took place on July 16, a week after Varoufakis’ resignation.

The planned parallel payment system would launch if banks were forced to close and would allow payments to be made between third parties and the state. The plan’s implementation would require the tax registration numbers of taxpayers, available from the General Secretariat of Public Revenues website, which is monitored by Greece’s creditors.

“The General Secretary of Public Revenues within my ministry is controlled fully and directly by the troika. It was not under control of my ministry, of me as minister; it was controlled by Brussels,” said Varoufakis.

The plan required hacking into the system to get the taxpayer registration numbers. To avoid alerting Greece’s creditors, which monitor the system, Varoufakis assigned a childhood friend of his, an information technology expert who became a professor at Columbia University, to perform the hack.

“I think the Greek people had authorized us to pursue energetically and vigorously that negotiation to the point of saying that if we can’t have a viable agreement, then we should consider getting out,” said Varoufakis in the call, referring to the results of the July 5 referendum in Greece.

“The prime minister before he became P.M., before we won the election in January, had given me the green light to come up with a Plan B,” said Varoufakis. “[T]he difficulty was to go from the five people who were planning it to the 1,000 people that would have to implement it. For that I would have to receive another authorization which never came.”

“[W]hen the time [for the authorization] came [Tsipras] realized that it was just too difficult,” Varoufakis told The Telegraph. “I don’t know when he reached that decision. I only learned explicitly on the night of the referendum, and that is why I offered to resign.”

According to The Telegraph, Varoufakis wanted to seize on the momentum of a landslide victory in the vote but was overruled.

In related news reported by Reuters, former Greek Energy Minister Panagiotis Lafazanis said he had urged the government to tap the reserves of the Bank of Greece in defiance of the European Central Bank and argued for a return to the drachma. “The main reason for that was for the Greek economy and Greek people to survive, which is the utmost duty every government has under the constitution,” he said.

The most disturbing part of Varoufakis’ call transcript is where the former finance minister hints at a plan to strip European countries of their financial sovereignty.

“[German finance minister Wolfgang Schauble] said explicitly to me that a Grexit is going to equip him with sufficient bargaining, sufficient terrorizing power in order to impose upon the French that which Paris has been resisting,” said Varoufakis. “And what is that? A degree of transfer of budget making powers from Paris to Brussels.”

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Universal Bitcoin Payment System OneBit Enters Alpha Testing
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In April, Bitcoin Magazine reported that startup OneBit was developing a Bitcoin wallet app that lets users pay at any store with contactless mobile payment by seamlessly and transparently accessing the credit card payment networks. OneBit securely converts users’ bitcoin on the fly into any major local currency and pays merchants via their NFC payment terminals, at zero fees.

Now, OneBit developer Toby Hoenisch has announced on Reddit that OneBit has entered alpha testing, and the first handful of alpha users are doing test transactions around the globe. In an Ask Me Anything (AMA) session, Hoenisch answered many questions from the participants.

Hoenisch confirmed that OneBit has zero fees.

“You will be able to pay world wide, at market rates at any shop that accepts credit cards via NFC!” he said. “But before we launch OneBit we want to make sure that our security is top notch. And for that we are talking with a bunch of highly motivated investors to bring bitcoin main stream.”

The OneBit website states that the developers plan to go into closed beta soon and invites readers to sign up for early access.

Though OneBit was first developed at a Mastercard Hackathon, Hoenisch said that OneBit doesn’t have an official partnership with Visa or Mastercard.

“But we also don’t need one,” noted Hoenisch. “Mastercard and Visa operate as a franchise business with thousands of issuing partner banks. So far they have not issued any guidance on how to deal with companies like ours. Therefore it is up to the issuing bank to decide if they want to do business with us.”

Hoenisch added that so far bitcoin is perfectly legal in most countries, and OneBit obviously won’t be available in countries where it is illegal to use bitcoin. Of course, some countries have heavier regulations and impose costly compliance measures to bitcoin operators. This is, according to Hoenisch, the case of the United States.

“We are not based in the US and due to the complexity of the US legal system, we will rollout in the US only after Europe,” said Hoenisch.

OneBit is a hosted bitcoin wallet. “You will need to deposit bitcoin before you can make payments,” said Hoenisch. “But then you will be able to do instant payments.” To allow instant payments, OneBit needs to control the bitcoin in the wallet, but users don’t need to deposit more money than they intend to use.

Currently, OneBit works only with NFC terminals. Commenting about how much NFC usage there is around the globe, many participants confirmed that NFC payment terminals are widespread in Canada, Australia, New Zealand, Germany, Austria and Scandinavian countries. Not so much in the United States – but that isn’t an immediate problem since OneBit’s initial rollout plan doesn’t include the U.S.

OneBit promises to be nothing short of revolutionary: allowing bitcoin holders to pay merchants via the OneBit wallet app and the credit card payment systems already installed, without requiring the merchants to take direct steps to accept bitcoin, would instantly open up many more physical points of sale to bitcoin users.

Photo Vodafone Germany / Flickr

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