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With the economic collapse in the country…the Lebanese are turning to cryptocurrencies

With the economic collapse in the country…the Lebanese are turning to cryptocurrencies

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Answer With the economic collapse in the country…the Lebanese are turning to cryptocurrencies

  • The economic collapse in Lebanon is eating up the pockets of the Lebanese and causing the closure of the last outlets (banks and financial institutions).
  • Cryptocurrencies are an alternative option for the Lebanese.

Cryptocurrencies have become a haven for Lebanese citizens especially after the government closed all local banks due to the ongoing risks that hover around them.

It is still not known when financial institutions will reopen, which may be one of the reasons why local residents start looking for alternative financial instruments, including cryptocurrencies.

Cryptocurrencies as a rescue solution:

The economic situation in Lebanon deteriorated after the government closed all local banking institutions until further notice.

Read:Binance Freezes Hacked Funds From Upbit

Thus, people wishing to withdraw their money can do so at a significant loss or receive checks denominated in US dollars, which are then sold for a fraction of their valuation, currently around 20% less.

On the other hand, those willing to do something with their savings must act quickly because the Lebanese pound is depreciating on a daily basis.

According to a recent Reuters report, some locals (mostly young people with sufficient knowledge of innovations in technology) have started dealing with cryptocurrencies due to this setback.

“Mario Awad” – a Lebanese citizen – told the media that many politicians, security officers, TV personalities and celebrities have also bought bitcoin or altcoins recently.

Another person, who identified himself as “Ahmed,” argued that cryptocurrencies are a hundred times more realistic than the dollars that Lebanese keep in banks.

According to sourceThe cryptocurrency of choice for local investors is the world’s largest stablecoin Tether (USDT).

As its value is pegged to the US dollar, in theory, it should remain unaffected by the notorious fluctuations in the cryptocurrency market.

Read:Now you can use the decentralized Binance platform through an extension in the Chrome browser

The Lebanese government has not yet placed the digital asset sector under its supervision.

But the lack of regulations does not appear to be a problem for local investors, most of whom do not trust the actions of the governing body.

It is worth noting that cryptocurrency mining is also booming in Lebanon mainly due to the cheap electricity prices.

Gad, one of the Bitcoin miners in Lebanon, stated:

Even if you were earning $10 a day using a regular computer, that’s now several times the minimum wage.

After what we went through, I never used Lebanese banks anymore.

The economic crisis in Lebanon:

Lebanon has been suffering from a deep economic crisis for two decades.

While the country was one of the most developed countries in the Arab region until 1975, the civil war that lasted until 1990 changed this trend.

The military conflict caused huge loss of life and property and destroyed the country’s financial system.

The conflict also left large parts of Lebanon in ruins, while the main political parties continued to divide society years after the war ended.

Read:The most famous scams targeting cryptocurrency investors on Twitter

Violent events were not absent after 1990 when Lebanese forces clashed several times with the Israeli army, while in 2005, Prime Minister Rafic Hariri was assassinated by a car bomb.

Political figures accused Syria of the assassination, and another conflict began.

Although not actively involved in the war effort in the past few years, civilian demonstrations and terrorist bomb attacks are not absent from Lebanon.

Needless to say, the unrest in the country has caused a massive emigration wave over the years.

Currently, up to 14 million Lebanese live outside their homeland (twice the population of Lebanon itself).

Aside from searching for a peaceful environment for themselves and their families, these individuals also fled a country where the financial network hardly operates.

Lebanon’s current inflation rate is over 160%, while the recently closed banks have exacerbated the problem.

The growing interest in cryptocurrencies offered by local residents due to the ongoing situation is nothing new.

Where Lebanon is one of the countries present in the list of countries that use the most cryptocurrencies next to Argentina and Turkey, where the citizens of these countries resort to the crypto cart to escape inflation rates or political turmoil.

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