Crypto can save the Lebanese people from economic collapse
Crypto could prove to be the solution for a country like Lebanon to recover its failing economy. Lebanon’s financial system is fundamentally dysfunctional as a result of decades of mismanagement.
Lebanese citizens are increasingly turning to cryptocurrencies as a means of survival in the face of economic turmoil plaguing the country of 6.8 million, according to a report by CNBC.
Tether, Bitcoin and other cryptos have begun to displace the country’s native currency and the US dollar in a number 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 astonishing 95% of its value, the monthly minimum wage has fallen 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 seen by the World Bank as perhaps the third worst economic collapse since the 19th century.
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Crypto can help heal Lebanon’s economy
Based on UN estimates, approximately 80% of the Lebanese population currently lives below the poverty level.
Today, many Lebanese locals see cryptocurrency as a means of livelihood. The report revealed that some individuals are mining digital tokens as their only source of income while searching for work.
Cryptocurrency mining requires expensive hardware, significant technical know-how, and a significant amount of electricity.
As a low-margin sector, crypto miners are driven to travel to the world’s cheapest power sources at scale. South Lebanon provides affordable electricity, which encourages miners to earn more money.
To get by in Lebanon’s current economic woes, others set up clandestine social media meetups to trade tether, a stablecoin, for US 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 locals wanted a more rational relationship with a currency that will make a difference.
Image: Watcher Guru
Bitcoin: Hope For An Ailing Financial System
MicroStrategy Chairman Michael Saylor has advocated Bitcoin as the only hope for the crisis-ridden West Asian nation of Lebanon. Saylor, a vocal proponent 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 all my life, and Bitcoin has helped me stay here.”
Other locals have put their faith in Tether (USDT), the dollar-pegged stablecoin.
Abu Daher, a miner who also offers cryptocurrency exchange services, stated:
“We started selling and buying USDT because of the huge demand for USDT.”
Although it is technically illegal to trade cryptocurrencies in Lebanon, there is no enforcement and the crypto community is thriving 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
