Lebanese businesses start to accept crypto payments
Arabian Business recently published an article on how Lebanon is witnessing increased demand for cryptocurrencies as the lira continues its downward plummet and the economic situation worsens. According to the article over the last year signs in storefronts began popping up indicating that certain shops would accept bitcoin payments.
Lebanese are increasingly turning towards cryptocurrency as a means to gain financial freedom during an ever-worsening economic and financial crisis and hyperinflation.
Not only are Lebanese using cryptocurrencies as an investment form, but a growing number of local small businesses, ranging from grocery stories to fashion boutiques, are accepting payment in bitcoins.
Over the past almost two years, the Lebanese Lira has lost 80 percent of its value as local banks have imposed “unofficial” capital controls, putting limits on cash withdrawals, transfers and international spending. The article quotes, Max Drifterson, a crypto enthusiast who trades crypto in Lebanon as saying, While Lebanese have traditionally either invested in real estate or kept their money in the bank to benefit from the old high interest rates, the current dire situation has changed everything. Now, Lebanese are seeking alternative investments in cryptocurrencies.
“The whole idea behind crypto is about having more freedom and control of your own finances. For citizens in countries that have high financial distress, cryptocurrencies can offer a big way out because it is non-custodial with minimal transaction fees to name a few desirable characteristics in such countries,” Drifterson said.
To sidestep the challenge of getting their liquid assets out of the banking system, Lebanese have been selling checks for a third of their value, Drifterson said. Similarly, they are selling checks to invest in crypto with the expectation or hope that they would make their money back, and then some, through cryptocurrencies.
As of last month, there were 5,000 Lebanon-based crypt-wallets and traders had dabbled with crypto, with 10 percent of those actively dealing in crypto and stablecoin – a digital currency backed by another asset, whether a different cryptocurrency, gold or a fiat currency, according to an article published in Unlock Blockchain, a MENA blockchain media platform.
Downloads of bitcoin wallet BlueWallet grew by 1,781 percent in Lebanon in 2020 compared to 2019. “I’ve definitely been seeing a surge in interest and use of crypto in Lebanon as more people are commenting and inquiring about crypto on dedicated social media or WhatsApp groups,” said Drifterson.
“I’ve also been seeing Facebook ads about Lebanon-based companies accepting payment in bitcoins for home rentals for example. People have no trust in the system anymore,” he added. Not all cryptocurrencies are created equal, and for Lebanese who have been jaded by the banking system and the economic situation, stabelcoins be the best option, explained Jeremy Arbid, a Lebanese-American crypto enthusiast.
“People in Lebanon should learn about cryptocurrencies and decentralised finance because they’ve found that the banks are not trustworthy and the lira is rapidly depreciating,” said Arbid.
“Trading Lira for a stablecoin like USDT or USDC which are pegged to the USD might help retain the remaining value of their money. It’s a safer and more stable alternative than selling Lira for a cryptocurrency like bitcoin which can be highly volatile even though it may be appreciating in value,” he continued.
Despite the surge in interest in cryptocurrencies among Lebanese residing in Lebanon, many still don’t have an understanding of how it works, and Drifterson said there is an opportunity for crypto-brokerage in the country.