- Lebanon’s economy has been in dire straits and the financial crisis has shattered the people’s confidence in banking systems. Amid such a distress, the Lebanese have taken recourse to Bitcoin.
As reported by Al Jazeera, the Association of Banks in Lebanon has enforced capital controls – forcing customers to withdraw their savings at the official exchange rate – rendering the value 40% less than that of the parallel market. The banks in Lebanon have also restricted transactions to the outside to ‘urgent personal expenses’. The report stated that cross-border transactions were capped at USD 50,0000 a year.
The Lebanese pound is pegged at about LBP 1,500 to the dollar — 40% less than the parallel exchange rate of LBP 2,500 per dollar.
Mahmoud Dgheim who has been a crypto trader since 2015 stated:
“Right now, Lebanese are interested in escaping tight restrictions on cash withdrawals and transfers. They basically want financial freedom. If you want to go around the banking system, Bitcoin is a solution.”
Given the current circumstances, it will not be a surprise if the financial crisis of the country snowballs into a state of complete chaos and disorder. Perhaps, decentralized currency will provide the way out of this economic turmoil, atleast to some extent – before the government figures out the best solution for the country.
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