In a popular referendum yesterday, Greeks voted to reject further European financial aid in exchange for more austerity. Despite promises to the contrary, Greek banks remain closed, allowing account holders to only withdraw a meager daily maximum of €60. Greek Finance Minister Yanis Varoufakis has resigned.

Greece will meet with its creditors tomorrow and try to negotiate for more debt relief and infusions of cash into its banks. Nobody is certain the course those negotiations may take, but one thing is for sure – Greek citizens are hurting as they remain cut off from their savings. Unfortunately, no matter which way those negotiations go, it appears inevitable that Greeks will continue to suffer financially.

Should negotiations with its creditors succeed, one proposed “solution” to Greece’s banking crisis is a “bail-in” of bank depositors, much like Cyprus in 2013. In that crisis, Cypriot bank accounts containing more than €100,000 had a portion of their excess savings seized. They essentially took money from the wealthy to shore-up all accounts.

However, a bail-in may be even worse in Greece. The Financial Times reports:

The plans, which call for a ‘haircut’ of at least 30 per cent on deposits above €8,000, sketch out an increasingly likely scenario for at least one bank, the sources said…

“It would be implemented as part of a recapitalisation of Greek banks that would be agreed with the country’s creditors — the European Commission, International Monetary Fund and European Central Bank.”

A 30 percent tax on deposits of more than €8,000. This is not just a tax on the wealthy. This could be a devastating blow to the middle class and small businesses across Greece. In the meantime, there are hints that the €60 per day withdrawal limit may be lowered further.

On the other hand, debt negotiations could fall apart again. In which case, the Greek government is going to have to move quickly towards a different solution. This might mean dropping the euro and creating a new currency. Easier said than done.

An interesting article from Bloomberg lays out the difficulties of switching to a new currency, citing a variety of recent examples. The bottom line is that a new currency would probably be next to worthless, because there is a complete lack of confidence in the Greek economy.

Greece would be more complicated because the transition would have to happen fast, with little planning. And unlike most other currencies that have been abandoned, Greece’s current currency — the euro — will remain in circulation across Europe no matter what. That means any new currency might have little appeal to Greeks, who would expect its value to fall once the market was allowed to set the exchange rate.

‘As soon as anyone got new drachmas stuffed in their pockets, they would do whatever it takes to get rid of them,’ said Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington.”

Peter Schiff has argued that it is ultimately in Greece’s long-term best interest to abandon the euro currency. But this would require Greece to establish a more responsible budget and economic policy on its own terms. He doubts that’s likely, given the socialist tendencies of Prime Minister Alexis Tsipras.

Americans watching the Greek drama unfold would be wise to consider an important question. How have you protected your savings should a banking crisis of this magnitude reach our shores?