How Cryptocurrency Can Be The Answer To Lebanon’s Financial Crisis
There are not that many options in Lebanon to buy Bitcoin and cryptocurrencies. However there is one and that is LocalBitcoins
A great exchange to buy Bitcoin on if you are located in Lebanon is LocalBitcoins. They provide a great service and has a ton of different payment options. Which makes it easy to get started with purchasing your first Bitcoins.
The economic crisis of Lebanon has been in troubled waters for years. The recent political turmoil and the effect of COVID-19 pandemic on the downturn of the global market have raised fears of government defaults and the devaluation of the Lebanese pound. As a result, a large number of Lebanese citizens are seeking information about bitcoin (BTC) and other cryptocurrencies and investing in them, which is relatively cheap and accessible compared to the fractured banking system.
The exchange rate for Lebanese pounds to USD has skyrocketed from 1,500 pounds per dollar to 4,000 pounds per dollar, indicating a major collapse of their financial system. As the financial and economic crisis is getting worse, the citizens are resorting to alternative means to keep their savings safe from becoming seized by capital control, resulting in the increasing devaluation of the Lebanese currency.
With that said, given the government’s lack of a comprehensive plan to deal with the financial and economic crisis, there is merit in having people taking the future into their own hands.
Dollars are already present in the restricted Lebanese banking system trade, being available in local black markets, which is easier to move around, at a cheaper value. This is one of the reasons why people buy bitcoins and use them to acquire the dollars in order to pay off their loans.
Cryptocurrency In Lebanon
However, Lebanon has not widely accepted the cryptocurrency adoption as there are restrictions from the Central Bank on buying these digital currencies using Lebanese credit cards. Slow internet and poor electricity supply have kept the citizens of the country away from these assets.
Various traders on LocalBitcoin get their cryptocurrencies by using bank accounts outside Lebanon and use the local listing as an advertisement. Some tech geeks and online poker players earn bitcoin from foreign clients or games, bring their currencies to this and other over-the-counter (OTC) traders in exchange for local currency.
The cryptocurrency is coming to Lebanon from the freelance market along with contributions from poker players and remittances. While most of the Millennials use social networks to find cryptocurrencies, veterans rely on exchanges. As the COVID-19 pandemic has affected traditional businesses and the supply chain ecosystem, the demand for Bitcoin and other cryptocurrencies are on the rise.
It’s estimated that the Lebanese trade between $1 million and $5 million a month using informal networks. As the pandemic situation has worsened globally, the fees of local hawala remittance networks have increased exponentially, making bitcoin a cheaper and more attractive option.
Various traders use online exchanges for advertising, but conduct the trade through other platforms. Various traders in Lebanon, even a few professional OTC traders that move assets at scale, rely on WhatsApp as one of the top communication platforms to discuss the deals, along with Telegram, Facebook and Twitter which are the other important social platforms in this scene.
Social networks have become the platform for financial deals free of banking restrictions, relying on global currencies like dollars and bitcoin. In response to this trend, the Lebanese government has banned apps which display the actual conversion rates of Lebanese pounds to dollars.
The increased demand for cryptocurrencies has led to a surge in Bitcoin usage as well as the price in the country. With the average price of 1 BTC on LocalBitcoins being 22.9 million Lebanese pounds, or $15,150, BTC is trading at $9,340 in the international markets. During the testing times in Lebanon where the government has no proper answer to the current financial scenario, Bitcoin and other cryptocurrency have proved to be the saviour to the assets of their citizens.
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