“Crypto is a way for people in Lebanon and similar countries to make money they wouldn’t dream of working a regular job. Crypto is also a means to substitute the local currency, which is plummeting every week,”
DailyCoin was informed by an anonymous Redditor.

On November 24, 2021, financial journalist Omar Tamo wrote that “the Lebanese lira crashed to its all-time lowest market value against the US dollar, with little-to-no sign of recovery.”

Since 2019, there has been an economic crisis. People began to switch to cryptocurrency because of financial problems. As it’s decentralized and free from governmental power, crypto provides an escape from Lebanon’s tragic situation.

Elie M., 30-year-old Lebanese talked to DailyCoin about the struggles of his people and how cryptocurrency can offer a way out for them. However, there are many hurdles.

Lebanon’s Hyperinflation

In 2019, banks told people that they would offer great rates of interest, including 10% for the dollar and 15% for the Lebanese pounds. People simply needed to put money into the bank for 3 to 5 years. Elie said that this sounded good and most Lebanese believed in banks.

The revolution then took place in late 2019, because banks didn’t allow citizens to withdraw money anymore. The currency experienced currency inflation and currency devaluation due to politicians who took the money and then transferred it into their foreign accounts.

Then, the central bank took all the money, which was the people’s money, from the banks as loans. Thus, the banks didn’t have the money anymore, and to this day, the Lebanese cannot withdraw their own hard-earned money.

“My dad has been working in the family business for 14 years saving money, as well as most Lebanese who had their life savings in the bank. They can’t touch the money anymore. You can’t withdraw the dollars, so you just sit and watch; the bank doesn’t give you any money,”
Elie said.

Moreover, the exchange rate went up at the same moment. One dollar used to equal 1,500 Lebanese pound. One dollar is currently worth 23500 Lebanese Pounds, which represents a 20% drop in its value.

“Let me give you an example,”
Elie said.

“I used to get paid $1,000 a month, which back then was 1,500,000 Lebanese pounds. Although the salary is still 1,500,000 Lebanese pound, it has been reduced to $50 due to the increase in value.

It’s impossible to stop it. Everybody protested and tried to shut down the streets, take out MPs houses, or attack banks. Nothing happened.”

Lebanese youth adapt to crypto

Many youth are currently trading cryptocurrency. Reddit has a large number of crypto-related posts. Many people are asking about how to set up an account, deposit money and how to trade. Cryptocurrency is complex and the majority of people who use it are beginners. Elie clarified the details of his past:

“I studied computer science at the American University of Beirut in 2009-2012. It was something I vaguely remember people talking about back in those days. People used to trade bitcoins for pizzas. Bitcoin was not something anyone expected to become. In 2016, Bitcoin jumped to 5,001, as I recall. Again, I thought I should join crypto, but it seemed very volatile, and I didn’t understand it yet.”
However, mining isn’t efficient in Lebanon; there are issues with electricity in Lebanon. People resort to backup generators when electricity cannot be used continuously for more than six hours per day. As electricity prices rise, so does the availability of electricity.

The COVID initiative drew attention to digital coins. Many began researching them and new cryptocurrencies emerged. Crypto became more popular.

“I remember seeing a post on Reddit, where a Lebanese lives off trading crypto and he was advising other citizens to join. It was two years ago. This is exactly one year ago. Even more, he gave out $2 of BTC or BNB. After I stated that I would like to join, he gave me all the details.

Binance was downloaded and I now use it to buy cryptocurrency on Reddit. There is a place where I can post and get information. I watch YouTube Coin Bureau to get information, I do my research about coins and I try to diversify my portfolio,”
Elie said.

Use of Cryptocurrency to Pay in Lebanon

Elie says that to trade cryptocurrency in Lebanon you will need to use middlemen who charge commissions. To deposit money in a Binance account you will have to pay 4% commission. Once you have the funds deposited to your account, you are ready to trade crypto. If you put $1,000, it’s likely going to end up at $900 on Binance because of all the commissions.

What exactly is a “middleman”? This is an area that’s very elusive and shadowy in the country. Are you a part of any political or elite class? Is he part of an elite group? Are there any connections? There is no way to know.

If you’re lucky enough, and you have someone who has a bank account outside Lebanon, a cousin, a relative, a friend, you can send them money with Western Union (NYSE:) They can also deposit money on your crypto trading account.

It is very hard to withdraw funds due to the sanctions in Lebanon. The majority of crypto money will stay in crypto for quite some time, which is why most people hold onto it. You can only withdraw your money via Binance. A middleman is required to help them withdraw their money. You will need to pay a commission to the middle man if you are making $2,000 in profit.

Cryptocoin Could Help Some of Our Problems

“Every day I see posts of Lebanese fleeing the country looking for jobs, even low wage ones. This is not about jobs as garbagemen or basic hotel room cleaners for individuals with degrees. Because he wants to escape the country, you will see an engineer in Dubai as a room cleaner at a hotel.

Because Lebanon isn’t worthy of what it has been through, I hope crypto can help change people’s lives. Before 2019, Lebanon was one of the most beautiful places in the world to visit for parties, the beach, and skiing in winter. There are so many wonderful places to visit and beautiful nature. Lebanese are one of the world’s friendliest people; they will invite you to their home, they will feed you like you’re a part of their family. You will be taken care of and shown around the country by them. We don’t deserve what happened to us,”
Elie shared.

To The Flipside

• DeFi is an alternative to banking that can open up new opportunities for people from countries with political instability.
• For people with severe financial difficulties, cryptocurrency can provide a vital extra stream of income.

What are the reasons to care?

Lebanon is facing severe economic and hyperinflation problems.

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