- Lebanon, which often happens to be in the news for its governmental collapses and riots are now facing an even more challenging state of financial affairs.
- Cryptocurrencies have been the talk of the town for very long, but one prospected even to shape a country’s economic stability.
Cryptocurrencies have been the talk of the town for very long, but one prospected even to shape a country’s economic stability. Lebanon, which often happens to be in the news for its governmental collapses and riots are now facing an even more challenging state of financial affairs.
Banks are on the brink of insolvency in Lebanon and no one is talking about.
People can't get their money out of the banks
ATMs are running dry
The LBP is at a 30-40% discount on the black market
I spoke to a Lebanese investor/broker to learn morehttps://t.co/8VmH2E3eiR
— Andrew Kang (@Rewkang) January 26, 2020
The failure of banks and other financial bodies to provide for adequate cash support and limiting withdrawals have left a broader market for bitcoin owners and traders. Organizations such as car dealerships have opted to accept bitcoin payments to handle the insolvency. Many other platforms have shifted to the same.
Bitcoin – A savior or a myth?
The collapsing market has left buyers with very fewer options, and bitcoin, therefore, is seemingly becoming the modern-day equivalent of an anchor to the sinking Lebanon government.
Although issues such as lack of electricity or limited power supply and expensive internet cost, do question its actual potential for the Lebanon people as a whole.
Lack of awareness in the general population about the usage of cryptocurrencies adds to the challenge. Also, the ongoing turmoil has made crypto companies skeptical about accepting transactions from Lebanese Banks.
Another concerning factor is the rising inflation and worsening exchange rates to the dollar, which is the most preferred form for bitcoin sellers in Lebanon, not taking into consideration the excess premium cost charged by traders due to the low supply and high demand elasticity.
During the constant chaos and high poverty and all the other concerns mentioned above, one must question the success of bitcoins in the larger picture.
So what can we conclude for now?
The lack of a proper support system limiting the usage of cryptocurrency. Bitcoin is currently the most preferred or in-demand mode of exchange for the current Lebanon market, which gives it the upper edge in terms of word of mouth and awareness which would flourish it’s market cap and demand even in developing countries.