People in Lebanon Explain How Cryptocurrency Can Save Their Country
“Crypto is a way for people in Lebanon and similar countries to make money that they wouldn’t dream of having a regular job. Crypto is also a way to replace local currency, which crumbles every week, â€an anonymous Redditor told DailyCoin.
On November 24, 2021, financial journalist Omar Tamo wrote that “the Lebanese pound has collapsed to its all-time lowest market value against the US dollar, with little to no sign of recovery.”
The economic crisis in the country has been going on since 2019. Due to financial difficulties, people have started to switch to cryptocurrency. As it is decentralized and free from government power, crypto provides an escape from the plight of Lebanon.
Elie M., a 30-year-old Lebanese, in an exclusive interview with DailyCoin, explained how people in his country are struggling and how cryptocurrency offers citizens a loophole, however, with many obstacles.
Hyperinflation in Lebanon
Banks in 2019 told the population that they would give attractive interest rates, 10% on the dollar and 15% on the Lebanese pound. All people had to do was put their money in the bank for 3-5 years. It sounded good, and almost all Lebanese trusted the banks and put their money there, Elie said.
The revolution then took place at the end of 2019, as banks no longer allowed citizens to withdraw money. There was monetary inflation and the currency was devaluing because of the politicians who stole the money and transferred it to their own bank accounts abroad.
Then the central bank took all the money, which was the people’s money, from the banks in the form of loans. So the banks ran out of money, and to this day the Lebanese cannot withdraw their own hard-earned money.
“My father has worked in the family business for 14 years, saving money, as well as most of the Lebanese who had their savings in the bank. And they can’t touch it anymore. You can’t withdraw the dollars, so you just sit and watch; the bank doesn’t give you money, â€Elie said.
In addition, the rate was increasing at the same time. Previously, $ 1 was exactly equal to 1,500 Lebanese pounds. At present, $ 1 is equivalent to 23,500 Lebanese pounds, which is a 20-fold decline in value.
“Let me give you an example,†Elie said.
“Before, I was paid 1,000 dollars a month, which at the time was 1,500,000 Lebanese pounds. Right now the wages are still 1,500,000 Lebanese pounds, but due to the new value, which is around 24,000 Lebanese pounds for $ 1, it makes me around $ 50 instead of $ 1,000. .
There is nothing you can do about it. Everyone protested, tried to close the streets, attack the houses of deputies, attack the banks. Nothing happened.”
Lebanese youth adapt to crypto
Currently, many young people are trading cryptocurrencies. On Reddit there are a lot of posts about crypto, a lot of people asking how to open accounts, how to deposit money and what to trade. However, cryptocurrency is complicated and most people are still newbies. Elie clarified his background:
“I studied computer science at the American University of Beirut in 2009-2012. And I vaguely remember, people were talking about, and back then it was nothing; people were trading Bitcoins for pizza. No one thought Bitcoin would become what it is today. I remember in 2016 Bitcoin started to climb to 5,000. Again, I thought I should join crypto, but it seemed very volatile and I haven’t figured it out yet. However, mining is not efficient in Lebanon; there are electricity problems in Lebanon. Sometimes electricity can only be used six to eight hours a day, and people use back-up generators. Electricity continues to be cut more and more, and the price of everything is skyrocketing.
When COVID arrived, many started looking for digital coins and many new cryptocurrencies started to appear. More and more people became interested in crypto.
“I remember seeing an article on Reddit, where a Lebanese man makes a living from trading in crypto and advising other citizens to join. It was about two years ago, exactly a year and a half ago, when the revolution began. And he was even giving out around $ 2 worth of BTC or BNB. I told him I wanted to join and he explained everything to me.
I downloaded Binance and now I usually go to cryptocurrency on Reddit, the subreddit. I post, I get my information from there. I watch YouTube Coin Bureau for information, do my coin research and try to diversify my portfolio, â€Elie said.
Using cryptocurrency in Lebanon
According to Elie, to trade cryptocurrency in Lebanon, you have to go through intermediaries, who take commissions. After requesting to put your money into a Binance account, you need to pay around 4% commission. Then you find the money deposited into your account and you can start trading crypto. If you put in $ 1000, it will probably end up at $ 900 on Binance because of all the commissions.
What is an intermediary? It is a very vague and dark area of ​​the country. Does he belong to a political class? Does he belong to an elite class? Does he have connections? No one really knows.
If you are lucky enough and have someone who has bank account outside of Lebanon cousin, relative, friend, you can send money to them with Western Union (NYSE :), and they can deposit the money for you into a crypto trading account.
The sanctions in Lebanon make it very difficult to withdraw money. Most of the crypto money is going to stay in crypto for a while, so most people hold it. The only way people can withdraw their money is through Binance. Again, they have to go through an intermediary. If you make a profit of $ 2,000 and want to withdraw the entire $ 2,000, you should go to the middleman, who will again take a commission for the withdrawal.
Hopes that crypto could solve some problems
“Every day, I see jobs of Lebanese fleeing the country in search of jobs, even with low wages. I’m talking about the jobs of garbage collectors and basic cleaners in hotels for graduates. You will find an engineer working in Dubai, right now, as a hotel room cleaner because he just wants to leave the country.
I just hope crypto changes the lives of some people in Lebanon for the better because Lebanon doesn’t deserve what happened to it. If you came to Lebanon two or three years ago, before 2019, it was one of the best places to come party, enjoy the beach, ski in winter. We have so many beautiful places and nature. The Lebanese are one of the friendliest people in the world; they will invite you to their home, they will feed you as if you were part of their family. They will take care of you and show you around the country. We don’t deserve what happened to us, â€Elie explained.
On the reverse
- DeFi, as an alternative to banks, can offer new opportunities to citizens of politically unstable countries.
- Cryptocurrency investments can be a crucial additional source of income for people facing financial problems.
Why should you care?
Hyperinflation and the economic crisis make life extremely difficult for the Lebanese.
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