Association of Lebanese Bankers (ABL) announced All banks in the country were closed indefinitely on Sept. 22 as depositors are actively withdrawing funds.
Meanwhile, young people in Lebanon are turning to cryptocurrencies to escape the financial crisis, with adoption increasing from 2021 onwards.
Due to the economic crisis, the government restricted access to deposit funds and closed all banks for a week on September 16th.
The news was also shared on Twitter by Binance CEO Changpeng Zhao. Zhao’s tweet attracted hundreds of replies in favor of crypto ownership and decentralization to prevent a complete shutdown of cryptocurrencies like Lebanese banks.
Banks in Lebanon have been closed until further notice.https://t.co/ssa8jVjtvV
— CZ🔶 Binance (@cz_binance) September 21, 2022
Lebanon has been in a financial crisis since August 2019, exacerbated by the 2020 pandemic and the Beirut explosion. The International Monetary Fund estimated Lebanon’s losses in 2020 at around $83 million and proposed a recovery plan for the country.
according to Reuters, the Lebanese pound fell from an initial pegging rate of around $1,500 to $15,000 in the parallel market by September 2021. This forced depositors to withdraw their money despite heavy losses and banks suspended withdrawals.
Like residents of most countries facing similar economic challenges, Lebanese have also turned to crypto for salvation. user said Reuters:
“People say that cryptocurrencies are not real. What we found in Lebanon is that this digital currency is 100 times more real than rollers in banks.”
Currently, Lebanese crypto exchanges are conducted via peer-to-peer (P2P) trading. Crypto enthusiasts in the region trade cryptocurrencies using his website, Telegram and Whatsapp channels that match buyers and sellers.
The total transaction value fluctuates between hundreds and thousands of dollars, and intermediaries receive a 1% to 3% cut in fees to make the exchange.
The country’s younger generation is leading the country’s crypto revolution. After experiencing many problems with the failure of a centralized financial system that has led to losses and forfeitures, Lebanese citizens have come to value decentralization and ownership above all else.
The 34-year-old cryptocurrency enthusiast admitted that he is excited about cryptocurrency growth in Lebanon. He said:
“Personally, I’m in the revolution…I can be the custodian of my money and keep it in my cell phone pocket.”