JorgeStolfi
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May 20, 2014, 03:16:18 AM

How would someone with euros in a Cyprus bank use bitcoin to move the money to a bank outside Cyprus?

Simple, all you had to do was find someone in Cyprus with bitcoins who was willing to swap them for Cypriot bank credit. Euro IOUs were still exchangeable between Cypriot banks during the capital controls period.
That does not seem to violate capital controls...

Note that no euros, real or virtual, left Cyprus; they aonly moved between Cypriot bank accounts.  Meanwhile, some bitcoins that were out there somewhere in the ether and were owned by one Cypriot became owned by another Cypriot.  The total wealth of the Cypriots, whether measured in euros, bitcoins, or material goods, was not changed by that operation.

Or am I missing something?