A millennial engineer working in the Gulf tells Al Jazeera he was blindsided when his earnings shriveled away after he returned home and deposited them into a Lebanese bank account.
Says Maher, who has asked the news outlet to conceal his identity,
“Nothing can prepare you for the shock of this.”
The foreign currency he deposited was immediately subject to strict currency controls under a battered economy that has been battling hyperinflation and skidding into its worst performance in over a decade. Lebanon is looking for a lifeline from the International Monetary Fund which is currently trying to help draft a comprehensive financial rescue plan.
Meanwhile, residents and workers are hard hit.
Hard earned cash deposits in foreign currency can only be withdrawn in Lebanese pounds at the official exchange rate, effectively and drastically slashing value by 40% compared to the open market.
Maher says cryptocurrencies like Bitcoin are emerging as a salvation.
“Suddenly everything turns upside down and all the options are open.”
Adds 29-year old Mahmoud, a Bitcoin trader since 2015,
“Right now, Lebanese are interested in escaping tight restrictions on cash withdrawals and transfers. They basically want financial freedom. If you want to go around the banking system, Bitcoin is a solution.”
With the Lebanese pound under strain, central bankers have lost their luster. The lack of trust is providing an opening for discussions around peer-to-peer cryptocurrency networks that allow people to send one another money or pay for services without being subject to currency restrictions prohibiting transactions over $50 or a few hundred bucks. Bitcoin users can also evade foreign exchange conversion rates and other monetary policies that devalue their government-backed fiat currency.