Crypto could prove to be the solution to a country like Lebanon to restore its failing economy. Lebanon’s financial system is fundamentally dysfunctional as a result of decades of mismanagement.
Lebanese citizens are increasingly resorting to cryptocurrencies as a means of survival in the face of economic turmoil hounding the country of 6.8 million, according to a report by CNBC.
Tether, Bitcoin, and other crypto have begun to displace the country’s native currency and the U.S. dollar in a variety of contexts, including mining for income and applying for day jobs, storing wealth, and making purchases.
Since August 2019, the Lebanese Lira has lost an astounding 95% of its value, the monthly minimum salary has dropped from $450 to $17, and Lebanon’s inflation rate is expected to skyrocket.
The collapse of Lebanon’s banking sector is currently one of the country’s biggest obstacles. The fall of the Lira and the general economic crisis have been regarded by the World Bank as perhaps the third worst economic collapse since the 19th century.
Crypto Can Help Heal Lebanon’s Economy
Based on estimates by the United Nations, approximately 80% of the Lebanese population is presently living below the poverty level.
Today, many Lebanese locals view cryptocurrency as a means of subsistence. The report revealed that some individuals are mining digital tokens as their sole source of income while searching for employment.
The mining of cryptocurrencies needs expensive hardware, considerable technical knowledge, and a substantial amount of electricity.
As a low-margin sector, crypto miners are driven to travel to the world’s cheapest power sources at scale. Southern Lebanon provides inexpensive electricity, which encourages miners to earn more money.
ln order to get by in Lebanon’s current economic miseries, others set up secret social media meetups to trade tether, a stablecoin, for U.S. dollars so they can buy food and other necessities.
While the path to cryptocurrency adoption may look different for other people, the report found that virtually all of the locals wanted a more rational relationship with a currency that will make a difference.
Image: Watcher Guru
Bitcoin: Hope For An Ailing Financial System
The chairman of MicroStrategy, Michael Saylor, has advocated Bitcoin as the only hope for the crisis-battered Western Asian nation, Lebanon. Saylor, a vocal advocate of Bitcoin, made the announcement on Twitter over the weekend in response to the CNBC report.
Meanwhile, architect Georgio Abou Gebrael, whose income consists of 90% freelance work paid in cryptocurrency, stated:
“Bitcoin has given us hope. I was born in my village, I’ve lived here my whole life, and Bitcoin has helped me to stay here.”
Other locals have placed their faith in Tether (USDT), the dollar-pegged stablecoin.
Abu Daher, a miner who also provides exchange services for cryptocurrencies, stated:
“We began by selling and purchasing USDT due to the enormous demand for USDT.”
While it is technically illegal to trade cryptocurrencies in Lebanon, there is no enforcement, and the crypto community flourishes while the government focuses on more serious economic issues.
BTCUSD pair trading at $20,772 on the daily chart | Featured image from Reuters, Chart: TradingView.com