Bitcoin Adoption in Lebanon Increases Amidst Worsening Economic Situation
As the current financial crisis rocking Lebanon continues to intensify, Lebanese citizens are increasingly looking to bitcoin to escape the country’s crippling economic situation. Lebanon joins the list of countries whose citizens have turned to the top cryptocurrency to counter the financial crisis.
Bitcoin Gives ‘Financial Freedom’
Lebanon’s financial situation has continued to plummet, with the value of the Lebanese pound declining. But a report on Al Jazeera on Tuesday, February 25, 2020, reveals that citizens are not sitting around waiting and hoping for things to get better before taking action.
The economic woes in Lebanon have caused more citizens to embrace bitcoin, which many see as a more stable option compared to the country’s fiat currency. Presently, the capital controls imposed by banks have seen savings decrease by 40 percent. Furthermore, forex withdrawals in the country record $50 monthly, while cross-border remittance capped at $50,000 yearly.
A statement by Mahmoud Dgheim, a Lebanese bitcoin trader, reads:
“Right now, Lebanese are interested in escaping tight restrictions on cash withdrawals and transfers. They basically want financial freedom. If you want to go around the banking system, bitcoin is a solution.”
The report also stated that a group of bitcoin traders reported a significant increase in trading volume following the emergence of capital controls in November 2019, with the traders recording a monthly volume of $1 million.
Another factor that has led to increased adoption of the flagship virtual currency in Lebanon is the lack of trust in the country’s banking system. With the people fearing that the economic situation would only worsen and eventually collapse, buying assets such as gold, real estate, and most especially bitcoin is seen as abetter option.
Bitcoin as a Safe Haven for Struggling Economies
Other factors that make bitcoin an attractive alternative include the absence of middlemen and the ease of cross-border remittance. By buying bitcoin, employers in the country can afford to pay workers their monthly wages.
A quote in the article speaking on the ease of transferring funds reads:
“Fresh money takes at least a week to 10 days to be transferred, and that’s if it’s sent. Meanwhile, I can transfer bitcoin in $100,000 batches in less than 30 minutes. It puts your mind at ease.”
Even wealthy investors from the Middle East with investments in the country have sought local bitcoin traders to help move large funds out of Lebanon.
With Lebanese citizens increasingly embracing the flagship virtual currency, it is a testament to the fact that bitcoin indeed is a safe haven for people experiencing financial crisis. Countries like Venezuela and Turkey have also seen its citizens embrace bitcoin to escape crippling economic situations.