There is no cash at ATMs in Hong Kong; citizens are buying Bitcoin because of new law in China

Social protests and government attempts to disrupt them can have unexpected consequences in different areas, including on new technologies. Information security experts report that ATMs in Hong Kong are running out of cash due to the possibility of China’s government taking highly intrusive and authoritarian measures to stop recent demonstrations and prosecute those responsible for their organization.

Rumor sprees have recently begun to spread that China will seek to arbitrarily freeze the bank accounts of many of those involved in organizing mass protests in Hong Kong as a method of repression; in face of this possibility, multiple people are making “panic ATM withdraws”, exceeding the amount of money available at each machine. “ATMs, especially those of HSBC, no longer have cash available, plus there are long lines to use these machines,” some users mention via Twitter.

This is not the only consequence, information security specialists report. According to the virtual assets-specialized portal BeInCrypto, the amount of cryptocurrency purchases in Hong Kong, specifically Bitcoin, increased to its highest level on LocalBitcoins, a popular exchange platform. “Cryptocurrencies could give activists in Hong Kong a new alternative,” the specialists say.

As they have been unable to cut off their communication channels, like Telegram group chats, Chinese authorities have tried to track the next moves of activists through their digital payment habits, so the characteristics of Bitcoin and other virtual assets would provide a new level of protection against government tracking.

“At this time there is no clear picture of Hong Kong’s current banking system, especially on financial institutions linked to China government, so any potentially useful alternatives will surely be used,” says Kyle Bass, director of investments at a prestigious financial firm. The expert’s claims have already been backed in the real world, as over the past week operations on the LocalBitcoins platform reached $12 million Hong Kong dollars, even exceeding the figures recorded during the longest period of Bitcoin growth in 2017.

There is still some skepticism about the reasons for this increase, some information security experts even claim that the real reason is less complex, attributing the increase to a single buyer that would have performed at least 30 large operations on the platform. LocalBitcoins publishes the figures of its trades on a weekly basis, so we only have to wait a few days to find out if this trend holds up or if this increase in cryptocurrency buying has another explanation.

On the other hand, information security specialists at the International Institute of Cyber Security (IICS) believe that it is still too early to determine an irrefutable link between social protests, the collapse of the financial system in the area of Hong Kong and the adoption of the cryptocurrency to conduct operations outside the Chinese government’s surveillance. For now, all we have to do is wait a little longer.