Currently, the country of Lebanon is going through one of the most severe economic recessions in its history.
The country’s GDP fell to a projected US$20.5 billion in 2021. To put it in perspective how severe of a crisis the country is in — Lebanon’s gross domestic product was double that amount by 2018 (US$55 billion).
These numbers are relatable to countries in war — the World Bank accredits Lebanon’s current economic crisis as one of the worst since the 19th century.
The nation’s currency — the Lebanese pound — lost over 90% of its value. Today, the country’s population lost most of its purchasing power, while imported goods are nearly impossible to buy due to the raise in prices.
To put it in perspective — in the recent past, a Lebanese soldier received a monthly wage equivalent o US$900. Today, that same soldier receives only US$50.
According to the United Nations organization ESCWA, poverty rates in the country’s 6.5 million population are skyrocketing. About 80% of citizens are classified as poor.
Food security rates are also bad. According to UNICEF, more than half of Lebanese families had at least one kid who skipped a meal in September, compared to little more than a third in April 2021.
Citizens Adopting Crypto
The general mistrust in the country’s ability to handle currency was made even worse after the government closed all local financial institutions until further notice.
People who wish to withdraw their assets can do so at a significant loss, or they can take out US dollar-denominated checks, which are subsequently sold for a fraction of their value – presently around 20%.
For this reason, many Lebanese people are opting to handle their finances in cryptocurrency instead.
Despite the fact that Bitcoin is in a bear market throughout 2022 – the cryptocurrency is still a safer investment when compared to the instability of the Lebanese pound.
Mario Awad – a Lebanese cryptocurrency enthusiast – told Reuters that many Lebanese citizens, including police officers, politicians, and celebrities are opting for crypto.
“Increasingly, it’s also your average person who is trying to get out of the collapsed banks and cut their losses,” Awad said.