On September 22, the Association of Banks in Lebanon (ABL) stated that all banks in the nation will close permanently due to aggressive depositor withdrawals, as reported by Cryptoslate.
According to Cryptosate, young people in Lebanon are using cryptocurrencies to get away from the financial turmoil, which has increased in usage since 2021. The government limited access to the depository accounts and shut down all banks on September 16 for a week due to the economic crisis. Changpeng Zhao, the CEO of Binance, also tweeted the news. In response to Zhao’s tweet, hundreds of people expressed their support for the ownership and decentralisation of cryptocurrencies, which keep them from going out of business like the banks in Lebanon.
Since August 2019, the nation has been experiencing a financial crisis, which got worse in 2020 with the explosion in Beirut and the epidemic. In 2020, the IMF predicted that Lebanon would suffer a loss of about $83 million and put up a recovery strategy for the country, Cryptoslate noted.
Reuters reports that by September 2021, the Lebanese pound, which was pegged at roughly $1,500 at the time, had dropped to $15,000 on the black market. Due to this, banks had to halt withdrawals because depositors continued to take money out despite large losses, Cryptoslate further stated.
(With insights from Cryptoslate)
Also Read: New York Judge orders Tether to document USDT backing