Lebanon is far from being a poster child for the adoption of cryptocurrency.
The news of the closure of Lebanese banks to prevent a banking operation has sparked predictable enthusiasm on the part of global bitcoin commentators. The Lebanese can no longer send foreign currency, mainly dollars and euros, abroad. In addition, due to the extremely limited access to banking services and the liquidity provided by well-established local networks, most Lebanese civilians also struggle to acquire bitcoins.
Ali Askar, a longtime Bitcoiner regular in Lebanon, told CoinDesk that some Telegram and WhatsApp groups for local merchants have almost doubled in size over the past year, with a private group of this type reaching around 300 members on weekends. -end last. After announcing banking restrictions, Beirut-based car dealership Rkein Motors quickly began accepting payments in bitcoins this week. Clearly, awareness is spreading.
However, the gap between the daily users of Bitcoin and the rest of the population continues in an area plagued by economic and political conflict.
"Bitcoin is not going to help people. This will help politicians, because they are filthy rich who have access to money, "an unnamed Bitcoin trader with his family in Lebanon told CoinDesk. He uses a European bank account to buy bitcoin, then sends it to people on the ground in Lebanon.
"That [the bitcoins] could perhaps help them stay at home with 24 hours of electricity and internet, and that they could work online to get paid for their work online. It's a utopian scenario, "he added. "In Lebanon, the Internet is very expensive. Electricity does not come often. We sometimes have electricity for only six hours a day. "
Another problem is access. Most bitcoin exchanges do not serve Lebanese users. In addition, informed sources said the recent sanctions imposed on a Lebanese bank that would be linked to the paramilitary group Hezbollah have made the cryptography companies reluctant to accept transfers from all Lebanese banks.
As such, sources say that bitcoin buyers are anxious to list only "digital goods", not cryptocurrencies, in any documents or digital messages related to the purchase of bitcoins in Lebanon.
"It's similar to Iran," said the anonymous trader, adding:
"People and communities suffer [sanctions] while the elite finds alternatives and business continues as usual."
To make matters worse for future bitcoins, the few exchanges serving Lebanese bank accounts calculate purchases in bitcoins in dollars.
Due to the widespread inflation of the Lebanese currency, buyers are offered a pittance in bitcoins for their fiat, said sources on the ground at CoinDesk. The same exorbitant fees for local access ramps also apply to grassroots transactions, the latter resulting in premiums rather than currency conversion rates.
Four local traders listed on LocalBitcoins work with bitcoin amounts in excess of $ 1,000 each. Because there are so few people in the field willing to sell bitcoin for cash, these traders can usually charge a premium of 10% over the general market, said an anonymous trader. .
Last August, a Bitcoiner based in Beirut told CoinDesk: "There is a demand and an offer for OTC transactions" in Lebanon, although the local scene is not able to meet the needs less tech savvy users. For example, a Lebanese expatriate, Eli Kopay, in Finland, told CoinDesk that his family was trying to buy real estate when banks closed international access. Now he is trying to help his family, from a distance, to learn how to use cryptographic exchanges.
"Suddenly, you can not send money abroad," Kopay said. "They do not have bitcoin and my father is so old that he does not believe in bitcoin. … If it's even possible [to buy bitcoin], it's too much [money]. "
Despite all these obstacles, the anonymous trader is still advising his Lebanese friends to find a way to buy bitcoin, under the sign of the threat of tighter capital controls on the horizon. Askar is even more optimistic about the prospects for Bitcoin in Lebanon. He told CoinDesk:
"The amount you buy increases every day … We had many political round tables every night in the protest areas. Bitcoin is present in one way or another in all discussions, "he said.
Protest image of Lebanon via Shutterstock