The plan as part of a broader effort to fight a parallel economic and financial crisis that has engulfed the country, according to CoinTelegraph. The country’s central bank has been pondering over the idea of a state-run digital currency since at least 2018. Efforts accelerated earlier in 2020 after violent protests and silent bank runs brought Lebanon’s financial system to a stop.
Faced with a dollar crisis, banks tightened restrictions on foreign currency transactions, with at least one major institution limiting withdrawals to just USD 400 a month. A plunging Lebanese lira made it almost impossible to transact in the local currency.
In June 2020, protestors set fire to the central bank in Tripoli, angry over the collapse of the lira, which would eventually plunge to more than 5,000 per dollar before restabilising. The growing confusion over Lebanese fiat triggered a wave of Bitcoin buying among locals, with peer-to-peer marketplaces like Localbitcoins seeing a sharp rise in activity.
The central banker added that a digital currency project to be launched in 2021 will help implement a cashless financial system to enhance the flow of money locally and abroad. At the moment, it is estimated that there are USD 10 billion stored inside homes, with Lebanon relying heavily on remittances from its vast global diaspora.
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