Source: Fitch SolutionsAs Lebanon's financial woes continue, the Middle Eastern nation is increasingly reliant on cryptocurrency, with many locals mining bitcoin (BTC) to survive and using tether (USDT) to buy staples at the grocery store amidst from an inherited financial collapse.
Lebanon's ongoing financial crisis erupted in 2019, and ever since, mounting difficulties have forced a significant portion of the country's population to seek financial security in cryptocurrencies. The Lebanese pound, the country's main currency, has lost more than 95% of its value since August of that year, and the national minimum wage has effectively fallen from the equivalent of €450 to €17 per month, plus a rate of inflation three digits. . reported CNBC.
Georgio Abou Gebrael, a 27-year-old architect from Beit Mery, a town east of the country's capital Beirut, who represents an emerging class of professionals transitioning from fiat to crypto, says 50% of his income comes from from independent work, of which he receives 90% in BTC. Using international wire transfers to collect payments from his foreign clients would steal a significant portion of his income after US dollars are exchanged for Lebanese pounds through these services, Gebrael said.
“It would lose about half the value,” he said. "That's why I was looking at bitcoin: it was a good way to get money from abroad."
Living in a bankrupt country forces many Lebanese to use cryptocurrency to perform normal everyday tasks that they previously did with fiat currency. Some hold online meetups to exchange USDT for US dollars to buy groceries, while others give up hope of landing a 9-5 job to pursue crypto mining and related businesses.
"Bitcoin really gave us hope," according to Gebrael. "I was born in my town, I have lived here all my life and Bitcoin has helped me stay here."
Despite the failure of its banking sector, in 2020 Lebanon revealed its intention to introduce a digital currency in a bid to restore confidence in the banking sector and move to a cashless system, according to Governor Riad Salameh. Central bank. Central bank. Since then, however, the CBDC project has not been launched.
Indicating a bleak outlook for the Lebanese economy, an August 2022 analysis by Fitch Solutions said that inflation in Lebanon is expected to hit the 178% level this year, down from 154,8% in 2021, which makes it the second highest rate in the world after Sudan.