The high-wire act that is Greece's debt negotiations hammered markets as pictures emerged of Greeks queuing to withdraw cash from ATMs and the Greek government said that banks would remain closed all week.
Asian equities suffered a heavy selloff in early trade, while U.S. stock futures were sharply lower.
The country's place in the euro zone entered a dangerous stage Sunday after the European Central Bank decided to keep the emergency funding to the country's banks at current levels.
Despite prior assurances from his government, Greek Prime Minister Alexis Tsipras said Sunday that he had forced the country's central bank to recommend a bank holiday and capital controls.
Tsipras also called a referendum for July 5, in which Greeks will vote on whether to accept the rescue funding offered by international creditors. A no vote is seen is likely leading to Greece's exit from the euro zone.
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—Reuters and the Associated Press contributed to this report.