Lebanon Devalues Its Own Fiat Currency By 90% – Got Crypto?• February 3, 2023 2:05 pm • Comments
When it comes to inflation concerns which is currently widespread in many countries around the world, it is clear that Lebanon has been one of the most severely impacted nations.
The nation just announced a new official exchange rate where its local currency has now been devalued by nearly 90%.
This means that that citizens within the country can no longer rely on using its local currency in order to preserve their wealth and that they need to look to other assets to do that.
Additionally, history has shown that the banks in the country have also restricted people from accessing their dollar savings.
This was due to the financial crisis that the country was facing and many citizens saw their savings almost disappear within a short period of time.
As a result of all these financial issues, Edward Snowden calls this out as a clear case where Bitcoin and other digital assets like XRP could fix the issue.
#Bitcoin is hope for #Lebanon.https://t.co/LjKJWkudFr
— Michael Saylor⚡️ (@saylor) January 31, 2023
While the IMF has offered a bailout by forcing the western Asian country into devaluing its official currency to solve its liquidity crisis, bitcoin (BTC) could have offered a better solution by providing some protection for currency devaluation and liquidity.
This is what the popular whistleblower and BTC proponent – Edward Snowden – hinted at earlier.
Bitcoin has a limited supply of only 21 million units, with more than 90% of its maximum supply already in circulation.
Due to the limited supply, Lebanese do not have to wake up to news such as their government devaluing their BTC.
Moreover, due to its decentralized nature, bitcoin could bring foreign currency to the cash-strapped Lebanese scrambling for alternative banking solutions without going through a financial institution.
Adding to Snowden’s comments, Michael Saylor also shared his perspective on the issue and stated that Bitcoin is the hope for the country of Lebanon.
After all, it would be able to allow self-custody for the citizens and would not face sudden devaluation due to the fact that the supply of BTC is already fixed.
As a result, the value of the asset itself would only go down if the demand went down.
On the other hand, the value of the local fiat currency has been wiped out due to the fact that the supply of the currency can be controlled and increased without any limits.
The trends show that digital assets continue to be a safe haven for many third world countries that are experiencing financial crises.
Inflation & currency devaluation are financially devastating. This will happen to over 100 more currencies in the coming years. #Bitcoin is the only hope. Don’t wait until it’s too late. https://t.co/LtxTWrl8T1
— Eric Weiss ⚡️ (@Eric_BIGfund) February 1, 2023
According to a report by Reuters, Lebanon on Tuesday said it will officially adopt a new exchange rate of 15,000 Lebanese Pounds per U.S. dollar, a devaluation of 90% from its current rate.
The government’s recent decision to shift the Lebanese Pound exchange rate from 1,507 to 15,000 is still a far cry from the rate in the parallel market, where the Pound was being traded at a much higher rate of 57,000 per US Dollar on Tuesday.
Meanwhile, the price of Bitcoin in Nigeria has risen to far surpass the global market average, thanks to the Central Bank of Nigeria’s call for a digital and cashless economy.
On NairaEX, a Nigerian crypto exchange, a Bitcoin is presently worth an incredible 17.2 million naira – that’s a whopping $37,296.
Lebanon's central bank has decided to devalue their currency by 90% tomorrow…
This is fiat money. This is scary.
— Lark Davis (@TheCryptoLark) January 31, 2023
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