What We Know About Yellow Vests' Bank Run and How Crypto Could Help It

Published on by Cointele | Published on

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On Jan. 7, activists of the French grassroots political movement the Gilets Jaunes - Yellow Vests - announced a bank run via social media, essentially hoping to meet their goals by destabilizing the local financial system.

While the political action does not mention cryptocurrencies, it seems that such a run on the banks could hypothetically affect the crypto market - and vice versa.

What's a bank run?A bank run entails a lot of people withdrawing their money from a given bank.

According to academic research on bank runs, they tend to occur naturally due to panic and rumors among depositors rather than voluntarily, which makes it harder to assess the potential effectiveness of the Yellow Vests' plan.

Brief introduction to the Yellow Vests movement and their bank run planThe Yellow Vests movement started in November 2018, when various posts on social media suggested blocking roads and using yellow, high-visibility vests as a symbol of solidarity and support.

According to some posts on social media, it is going to be accompanied by a bank run on top of more traditional demonstrations.

In response to the news about the crypto-friendly license, the French stock market regulator, the Autorité des marchés financiers, jointly issued a warning with the country's central bank and French Prudential Supervision and Resolution Authority recalling the risks associated with "Speculative" crypto assets.

So is the bank run likely to succeed, and what could it mean for crypto?As the French magazine Capital states, the potential disruptive element of the upcoming bank run could technically be considerable: When banks start to collapse due to their inability to cover the costs of operating, the whole sector is likely to fail altogether.

"Triggering a bank run requires huge queues at the counters, very honestly I think the strike force of yellow vests is too weak to destabilize the sector even at the margin."

Thus, one can only speculate about the effects a French bank run could have on the crypto market and whether cryptocurrencies could also streamline the protest.