Total Economy crashes in Lebanon: Citizens adopt Bitcoin and Tether as option

• Lebanon is facing its worst economic crisis. 
• The local currency plunged by 90%.
• Citizens are looking at Bitcoin and Tether as alternatives. 

What is going on in Lebanon?

Lebanon was once among the developed countries of the Middle East in the 1970s. Facing its worst financial crisis. Civil War, Conflicts with Syria and Israel, Political assassinations, and mass migration of its citizen are some reasons for the total economic meltdown.

The condition is so severe that GDP has shrunk by 40% since 2018. Inflation is at 160% and expected to soar at 178%, worse than Venezuela and Zimbabwe. Their currency plunged by 90%, and 70% of its population is now under the poverty line. Banks have lost $65 – $70 billion, four times more than the country’s GDP. Due to this constant degradation and conflicts, almost 14 million citizens have migrated to different parts of the world, almost twice the current population. 

Shift towards Crypto

With local currency being almost useless, locals are now massively shifting towards cryptocurrencies. They still get cheaper electricity due to hydro-power stations and use this to mine bitcoin. There is also a massive shift towards stable currencies like USDT, so much so that it has been accepted as a mode of payment. According to CNBC, Lebanon stands second after Turkey in crypto transactions. 

Citizens are actively mining BTC, and other currencies, minting their own money, which led the government to raid unauthorized miners and raise electricity prices. Although BTC prices keep fluctuating, keeping it as an asset is still beneficial, & allows its transactions around the world.  

The 27-years-old Georgio Abou Gabriel, a former Architect in Lebanon, lost his job in 2020. And banks did not allow to take out his own money, as such transactions were seized and termed IOUs. Then he shifted to Bitcoin, asking his employers to pay in BTC. In his first assignment for a Car shoot video, he got $5 worth of BTC. Though a small amount, this led Gabriel to trust the crypto market, which he thought was a scam in 2016. He further says, “Bitcoin has really given us hope, I was born in my village, I’ve been here my whole life, and Bitcoin has helped me stay here.” 

What Caused the Downfall?

A massive civil war occurred at the end of the last century, claiming thousands of lives and dividing society. The country clashed with Israel multiple times; in 2005, former Prime Minister Rafic Hariri was assassinated in a car bomb explosion. Politicians blamed it on Syria, triggering another massive war and conflicts, further hampering its economy.

Cryptocurrencies were invented to be a decentralized economy, and they have proved their worth in helping the citizens of Lebanon. At the time of crisis when their government failed to support them. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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