French grassroots political movement is planning a bank run on Jan. 12.
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.Dubbed the “Collectors’ Referendum,” the movement’s latest demonstration calls on supporters to withdraw their savings from financial institutions on Saturday, Jan. 12. 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. It normally happens when investors start to feel that their bank may cease to operate in the near future.
As a result, a fractional-reserve banking system — in which banks keep part of their assets locally, usually at least equal to a fraction of their deposit liabilities — becomes challenged, while people start opting for other assets instead of fiat: for instance, bonds, precious metals or, theoretically, cryptocurrencies, as their decentralized structure might guarantee more independence from financial institutions.
There have been numerous bank runs throughout history, namely during the Great Depression and the 2007-08 financial crisis. However, 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 plan
The 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 (hence the name). Mass protests across mainland France followed, with the immediate cause being the carbon taxes on petrol and diesel introduced by the French President Emmanuel Macron. Consequently, the activists have demanded lower fuel taxes, the reintroduction of the solidarity tax on wealth, a higher minimum wage and Macron's resignation.
Another crucial point for the Yellow Vest movement is the Référendum d'initiative Citoyenne (Citizens Initiative Referendum – RIC), the proposal for a popular referendum in which citizens could propose and repeal laws, amend the constitution or remove an elected representative. Essentially, it is a form of direct democracy akin to the one employed in Switzerland.
Over a few weeks, the protestors caused the French government to put its plans for fuel taxes and increased electricity tariffs on hold. Moreover, Macron has since introduced more measures to restore peace: namely, a minimum wage increase, a U-turn on a planned tax increase for low-income pensioners, and tax-free overtime payments and end-of-year bonuses. Nevertheless, the protests are still ongoing. The latest series of demonstrations, dubbed “Act VIII,” brought even more skirmishes onto the streets of France on Jan. 5.
“Act IX,” in turn, is scheduled for next Saturday, Jan. 12. And, according to some posts on social media, it is going to be accompanied by a bank run on top of more traditional demonstrations. Thus, speaking in a video uploaded to Facebook on Jan. 7, an activist named Tahz San says:
"For Act IX, we will scare this state legally and without any violence [...] through the Référendum des percepteurs [Collectors' Referendum]. [...] We all know that the power of a country is not in the hands of the government but in those of the banks. If the banks weaken, the state weakens immediately. [...] On Saturday, at 8 a.m. we will all vote by withdrawing our money [...] till the RIC won’t imposed.”
It doesn’t matter the sum that will be withdrawn, and it is advised either to spend it at some artisan local shop or save at home “under mattresses, as did our grandparents,” according to San. In case of failure, the operation should be reproduced the following month.
The very same idea was soon voiced by Maxime Nicolle, also known as "Fly Rider," a popular spokesperson for the grassroots movement. "Many people will withdraw their money from banks. Many, many, many," he said while discussing the so-called “Tax Collectors’ Referendum” in a live broadcast on Facebook. “We are going to get our bread back. [...] You’re making money with our dough, and we’re fed up.” The video has since amassed around 1 million views.
Therefore, the bank run’s advocates hope to force the French government to meet their demands through a nonviolent way. In other words, the Tax Collectors’ Referendum could be compared to the recent Proof of Keys event organized by entrepreneur Trace Mayer among members of crypto community. Timed to coincide with the 10th anniversary of the Bitcoin genesis block, the event aimed to motivate Bitcoin users to remove all coins stored with trusted third parties and take back control of their private keys.
How popular is Bitcoin in France?
The extent to which the demonstrators appear to support cryptocurrencies has not been measured, but some photos of an alleged protestor wearing a yellow vest saying “buy bitcoin” on the back has gone viral among crypto-oriented blogs. Additionally, similar vests are currently being sold on Amazon.