Lebanon banks on Bitcoin. Lebanon’s financial crisis has banks looking for alternative monetary policy and citizens scrambling for alternative banking services.
The economic crisis has been raging for years, but political turmoil and the pandemic-induced global market downturn has raised fears of government defaults and the devaluation of the Lebanese pound. This results in more Lebanese seeking information about bitcoin (BTC), which is relatively cheap and accessible compared to the banking system.
Patrick Mardini, CEO of the Lebanese Institute for Market Studies shared that the exchange rate for Lebanese pounds to dollars has skyrocketed from 1,500 pounds for every dollar to 4,000 pounds for every dollar. Dollars inside the restricted Lebanese banking system trade for less than physical dollars from the local black market, which are easier to move around. This is why some people are using bitcoin to buy black-market dollars to pay off their bank loans cheaply, said bitcoin researcher Matt Ahlborg.
Referring to how most newbies use social networks to find bitcoin veterans rather than rely on exchanges, Ahlborg commented that “The bitcoin coming into the country is coming from the freelance market … plus a little bit from poker people and remittances. There’s more demand due to the COVID-19 shutdown of traditional finance and supply chain businesses.”
An anonymous OTC trader, who has been operating in Lebanon since 2013, estimated the Lebanese people trade between $1 million and $5 million a month using informal networks, which dwarfs the $54,916 worth of Lebanese bitcoin transactions tallied over the past year on Paxful and LocalBitcoins combined. Now that hawala options are more expensive, by comparison, bitcoin is a cheaper and more attractive option, he said.
[image: Lebanon Tours]