On September 22, the Association of Banks in Lebanon (ABL) stated that all banks in the nation will close permanently due to aggressive depositor withdrawals.
The government limited access to the depository accounts and shut down all banks on September 16 for a week due to the economic crisis.
Young people in Lebanon are using cryptocurrencies to get away from the financial turmoil, which has increased usage since 2021.
Changpeng Zhao, the CEO of Binance, also tweeted the news. In response to Zhao’s tweet, hundreds of people expressed their support for the ownership and decentralisation of cryptocurrencies, which keep them from going out of business like the banks in Lebanon.
Reuters reports that by September 2021, the Lebanese pound, which was pegged at roughly $1,500 at the time, had dropped to $15,000 on the black market. Due to this, banks had to halt withdrawals because depositors continued to take money out despite large losses.
Since August 2019, the nation has been experiencing a financial crisis, which got worse in 2020 with the explosion in Beirut and the epidemic. In 2020, the IMF predicted that Lebanon would suffer a loss of about $83 million and put up a recovery strategy for the country.
Bitcoin in Lebanon
The people of Lebanon looked to cryptocurrencies for help, just like citizens of most other nations that experience comparable financial difficulties. According to a 31-year-old cryptocurrency user who lost thousands due to the plummeting Lebanese pound,
It’s amusing when people claim that cryptocurrency is fake since, as we discovered in Lebanon, it’s a hundred times more real than the cash we have in the bank.
Peer-to-peer (P2P) trading are now how Lebanese cryptocurrency exchange operates. Crypto aficionados in the area use websites, Telegram channels, and WhatsApp groups to connect buyers and dealers. The total trade value ranges from hundreds to thousands of dollars, and the intermediaries receive a commission of between 1% and 3% for handling the exchange.
The young generation of the country is driving the crypto revolution there. The breakdown of the centralised banking system, which resulted in losses and expropriation, caused so much pain for Lebanese residents that they began to cherish decentralisation and ownership above all else. A 34-year-old cryptocurrency enthusiast acknowledged that the development of the industry in Lebanon has him fired up. He stated:
“As for me, I’m here for the revolution… I can keep my money safe and have it on my phone in my pocket.
- Lebanese people turn to cryptocurrencies and decentralisation as banks permanently close
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