Lebanon, the Jewel of the Mediterranean, is the subject of various love songs and songs of praise. But ravaged by civil war towards the end of the 20th century, it then emerged as a struggling democracy. Still racked by sectarianism, intensely corrupt political agencies, and a fledgling economy with a heavily inflated currency, the nation erupted in inflamed protests several months ago. Cryptolydian analyses how cryptocurrency usage may assist this country in need.
Lebanon’s recent economic history
The country’s parliament is still largely based on sectarian lines. Meanwhile, militia groups like Hezbollah resorted to political means in the aftermath of the Lebanese Civil War. Lebanon’s political classes have long been labelled as corrupt. A lack of oversight has left the country’s financial institutions in dire straits. Due to intense party loyalty, encouraged perhaps by the respective parties’ erstwhile wartime camaraderie, institutions and private companies profited off the Lebanese state’s coffers. The banks and people on the other hand suffered from the aftermath. The recent effects of this severe mismanagement have resulted in blackouts, food shortages, and a monthly inflation rate of 56%. The people have taken to the streets to demand an overhaul of the old systems.
The cryptocurrency question
As Lebanon’s currency plummets, the need for US dollars has increased like never before, leaving Lebanon with a shortage of foreign currency in its financial institutions. Many people have resorted to buying cryptocurrency from abroad and then buying US dollars on the black market, reports Coindesk. Bitcoin has emerged as the most desirable and safest currency in the country.
Furthermore, encouraging blockchain technology may smooth financial aid deals going into Lebanon and boost the economy. Cointelegraph notes that the use of blockchain technology in financial aid schemes might bring more transparency and inhibit funds from landing in the hands of the established oligarchy, as it has been for years.
As the catastrophe in Lebanon unfolds, the world looks forward to Lebanon’s swift recovery and emergence from the ashes to once again take her rightful place amongst the family of nations.