The financial system of Lebanon is not in the best of conditions at the moment and it has been so for a while. The country is facing economic woes that are so severe that banks are already shutting down all over the Middle Eastern nation.
But at this moment that the banks are about to restart and try their luck once again, they are doing so with caution. In fact, there is a conditionality that has been attached to their opening shop again.
Although they have not explicitly called it capital controls, the banks are saying the maximum withdrawal per week is going to be $1,000. This applies to all accounts that are denominated in FX.
Insiders say the plan is to place a proper control on the circulation of cash coming from outside the country. It also shows an unfriendly aspect as it will diminish the ability of people within Lebanon to gain from remittances sent by relatives living overseas.
Even though this all looks and feels like classic capital control, the banks are insisting it is nothing of such. In fact, the banks have vowed to go ahead with it in conjunction with the apex bank of the country.
For a nation reeling in severe economic woes, this is more than interesting. The current problems facing the economy of Lebanon and the anti-people strategy of cutting access to funds does not reflect anything good. But that is for the conventional banking system as what is bad news for the conventional banks is actually sweet music in the ears of those in the cryptocurrency sector.
Cryptocurrency Gets the Attention
As the economists of Lebanon seem paralyzed and impotent to solve the multiple issues bedeviling the country’s economy, help may come from an unlikely sector. Cryptocurrency is being rightly touted as one of the most effective solutions that can be deployed to address the crisis. As a matter of fact, Bitcoin is being specifically referred to as the real deal in this matter. By nature, Bitcoin and other digital currencies are not centralized and they have a worldwide reach. There are no border constraints as with the fiat currencies.
As the banks in Lebanon shut down, it has no impact whatsoever on the cryptocurrencies. But that is not all. As the conventional banks are placing all kinds of restrictions with the inflow of funds from abroad, cryptocurrencies can help greatly.
This is because cryptocurrencies like Bitcoin are not bound or limited in any way by political borders. Thus, those making use of cryptocurrencies can receive and send money as they like. The location or the country of the sender or recipient becomes immaterial when it comes to digital currencies.
Major Banking Mistakes
It is not difficult at all to discover the flaws with the conventional banking system. Economic recessions and all sorts of financial crises have exposed the several flaws and mistakes of the traditional banks. All these only do just one thing, make the cryptocurrencies even more attractive. Lebanon may have no other choice but go crypto.