
Lebanese banks facing a crisis, but people can still turn to Bitcoin
- Lebanon continues to struggle financially, with the situation continuously becoming worse for its people.
- Multiple aspects, including massive debt, the resignation of Lebanon's Prime Minister, lower weekly cash withdrawals, and more, continue to feed the financial crisis.
- Many in the country are turning to Bitcoin and other cryptos, if not to preserve their funds' value, then to transfer money internationally and purchase property elsewhere.
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It has been over 11 years since the financial crisis that has led to the creation of Bitcoin, but already, numerous countries’ banks are once again facing significant difficulties. Lebanon has been the latest example of a country whose banks are facing a major crisis, and Bitcoin is finally fulfilling its original purpose and stepping in as an alternative.
When it comes to the Lebanese national currency, it is facing numerous issues, including extreme devaluation, empty ATMs, a $300 weekly cash withdrawal limit, and more. People are experiencing major difficulties when it comes to accessing money, even in the banks themselves.
With the financial collapse on its way — once again caused by people in positions of power — many are turning to Bitcoin as a safe haven. The coin’s decentralization once more secures that it cannot be controlled or manipulated by the banks, ensuring that the users’ money retains its value.
The financial crisis strengthens
Copy link to sectionOf course, the main cause of Lebanon’s financial troubles comes from major debt, but also due to Prime Minister Hariri’s sudden disappearance. Hariri then emerged in Saudi Arabia, from where he announced that he will resign. As a result, bank deposits spiraled down, while the interest rated skyrocketed.
Meanwhile, the country’s debt to the US continued to grow, and to try and deal with the situation, the country bolstered its dollar reserves by subsidizing US dollar deposits.
According to estimates, Lebanon requires between $20 billion and $25 billion-large bailout, but since the situation in the country is far from favorable, it is unlikely that financiers would get involved. As a result, there is less and less money for the country’s citizens to obtain and use.
As mentioned, the country had limited cash withdrawals, first to $1,000 per week in November, and now to $300.
Many have already started to turn to cryptocurrencies, using what little cash they can obtain to purchase BTC and USDT in order to preserve the value of their money. Even so, it is believed that the purchase and use of cryptocurrencies is not their final investment. Instead, the people of Lebanon are simply using this method to move their money internationally.
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