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There appear to be a lot of economic difficulties going around these days. So much so that Lebanon has had its fair share. Lebanon is now experiencing a severe economic downturn, leaving some residents with little choice but to turn to cryptocurrency.
Surprising, to say the least, given all the ruckus in the crypto space lately. This entire scenario reminds me of the bible verse where it says something like "the rejected stone became the cornerstone." Please just ignore my pathetic effort at a joke.
The Lebanese liquidity crisis is an ongoing financial crisis affecting Lebanon, that became fully apparent in August 2019, and was further exacerbated by both the COVID-19 pandemic in Lebanon (which began in 2020) and the 2020 Beirut port explosion. The roots of the crisis run deep and the country experienced liquidity shortages in the years prior to 2019 but the full extent of the fragility of the economy were concealed by the financial engineering[1][2] of the governor of the central bank. Lebanon's crisis was worsened by U.S. sanctions targeting Syria's government and Iran-backed Hezbollah.
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The reports have it that Lebanese locals have chosen to rather do their transactions and keep their Bitcoin and Tether over traditional banks. What irony!
A recent report by CNBC has brought to light the dire state of the economy in Lebanon which has left many of its residents with no other option but to turn to crypto to help their financial situations.
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During my study, I discovered that Lebanon's economic problems began roughly two years ago. A regrettable outcome of wars and mishandling of cash, COVID, etc.
In terms of currency value, both the Ghana cedi and the Nigerian naira have depreciated. However, the Lebanese pound (or lira) has lost no more than 95% of its value since the start of the economic crisis. Almost every industry has suffered.
Literally, every sector has suffered as a result of this economic downturn Inflation is the order of the day, the cost of living is skyrocketing, and their minimum wage is next to nothing.
As a Nigerian living in Nigeria, I have seen firsthand the effects of my currency's depreciation on my economy. As a foodie who is very into food and who goes grocery shopping virtually every weekend, I can't tell you enough how many times I open my mouth in "utter shookery" every time a seller tells me the price of an item. For example; I went t the market to get rice today and the price of a "derica" has gone from #500 last week to #1,000 this week, DOUBLE!
At this point, nothing surprises me anymore.
CNBC interviewed many residents of Lebanon that regard Bitcoin as a haven and their last hope of survival. Locals have started mining digital tokens as their primary source of income and have even started organizing gatherings through the social media channel Telegram to exchange Tether (USDT) for dollars so that they can buy food.
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The Lebanese locals are so optimistic about this method of payment and earnings that Michael Saylor, the chairman of MicroStrategy, also believes that Bitcoin is practically all they have to grasp on for survival.
For some of these Lebanese residents, cryptocurrency represents the teeny tiny twinge of hope because they earn and save in crypto. I cannot help but wonder about the poor, non-tech-savvy folks who have no idea what Bitcoin is. What exactly is their escape mechanism?
Now, when someone undermines cryptocurrency and its countless benefits, my reply is in what a fellow hiver @onwugbenuvictor
What happened or is currently happening in Lebanon is exactly the reason why Bitcoin, Altcoins, Stablecoins, and Decentralization are the future of money and a chance at financial freedom. The Lebanon government in collaboration with the central bank and all the banking bodies in their country decided not only to hyperinflate their currency the Lebanese pound, but they also locked their citizen's savings and accounts, which those that have their money in crypto and stablecoins would not be after because of the beauty of decentralization, which simply means the government can not touch or manipulate their money, so it safe out of the reach of the government.
THANK YOU FOR READING.
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Good News
Do you see the reasoning behind my comment on your previous post now?
I hope things get better in Lebanon. I don’t want things to get that bad here, but I don’t see any other way Ghanaians will see the need the learn about crypto. Crypto adoption here is very poor, seriously.