Sunday, November 28

After the despair of the banking system, the Lebanese are turning to digital currency trading

Beirut – The demand for digital currencies has grown in recent years, despite warnings of their investments’ adventures in the hope of huge and quick profits, and categories in Lebanon have accompanied their rise, but the demand for them has expanded after the collapse that afflicted the country since the end of 2019.

As a result of the high rates of poverty and unemployment, the loss of the lira more than 95% of its value, the erosion of salaries and the banks’ seizure of Lebanese deposits in hard currencies, young Lebanese found that cryptocurrencies have become a market worth taking risks, and their repercussions, in their opinion, are not worse than the huge losses they incurred in the banking and economic system.

With hundreds of digital currencies around the world with a market value of more than one trillion dollars, and Bitcoin taking the largest share of it, what does the pace of investment in Lebanon look like?

Experts consider that monitoring the volume of investment in digital currencies in a geographical spot is a very complicated issue, because its electronic and encrypted trading does not allow tracking and accessing the data of its users.

However, in-kind observation shows that Lebanese youth groups – particularly those who are tech-savvy – have boosted their investments in digital currencies, by joining groups on WhatsApp or Telegram, for example, where most digital transactions take place.

The loss of the lira more than 95% of its value prompted some to turn to digital currencies (Reuters)

live testimonials

Al Jazeera Net has monitored 3 types of cryptocurrency activities in Lebanon:

  • Digital currency mining, in which people called miners are active, create new currencies, decode and track trading operations by recording them in “block chains”, by highly efficient computers designed for this purpose, and they consume huge electrical energy.
  • “Influencers” are the groups that invest in cryptocurrencies and have an external balance and act as intermediaries by exchanging crypto units.
  • The amateurs are beginners and small investors, and perhaps they are the broadest category, as the value of their investments does not exceed a few hundred dollars, and some of them buy coins worth 10 dollars, for example.

In the first type, the 42-year-old Lebanese Nafeh Saad, who works as a programmer in a private company, has been active for 8 months. He indicates – to Al Jazeera Net – that he initially invested about 3 thousand and 800 dollars, and makes monthly profits of 300 dollars.

What attracted Nafeh to the world of cryptocurrency mining is his passion for verifying them, arithmetic operations, and tracing the way to convert them. Given the electricity crisis and its outage for about 18 hours a day, Nafeh bought two electric batteries for his house, and disconnected the electricity network for his mining computers.

Nafeh realizes that mining digital currencies takes a great deal of effort, but the economic collapse was an impetus to go through his experience, and he sees that – as a Lebanese – he lost his confidence in the lira and the banking system alike, and therefore, he found in digital currencies a way to make profits, pointing out that he monitored People transfer money to Lebanon through cryptocurrencies instead of banks; Others buy coins to keep in their phones as units in the hope that they will appreciate in value.

In the second category, the Lebanese Omar Khattab, 31, who works in the field of business administration, is active in Lebanon in the field of digital currencies, and has a channel on YouTube and TikTok.

Omar has entered the field of cryptocurrency trading since 2017, and he says – to Al Jazeera Net – that he is working on raising awareness through videos about how to technical analysis of digital currencies and the most profitable projects after undergoing online courses in the field.

Omar noticed a wide Lebanese interaction with him, specifically young people under 35 years of age, who are influenced by his opinion for several factors: the global wave on digital currencies, and the follow-up to the history of Bitcoin, when it started at a value of one cent about 10 years ago, and finally reached about 60 thousand dollars.

Omar does not deny the occurrence of great losses as a result of fraud and the lack of knowledge of many in this world, and links the demand for them in Lebanon with distrust of banks or storing cash savings in homes, not to mention the ease of transferring money, no matter how large, without transactions.

It encourages investing in legitimate digital currencies such as Bitcoin or Ethereum, rather than other insecure currencies such as Shiba.

Of the third category, one of the traders, Shadi Hannoush, who works in the field of technology, tells us that he did not enter the world of trading professionally, likening digital currencies to the world of the stock exchange.

Shadi believes that every digital currency that rises at a moment has value in the future, and that he seeks to develop his portfolio; He said he made 5.5 times the money he invested.

Chain of block erupters used for Bitcoin mining is pictured at the Plug and Play Tech Center in Sunnyvale, CaliforniaSome people in Lebanon are active in digital currency mining despite the electricity crisis in the country (Reuters)

conflicting opinions

Lebanese experts warn against indiscriminate investment in digital currencies, on the grounds that they are high-risk speculation, and because they are not a substitute for currencies and there are no Lebanese institutions that accept them for monetary exchange, and they do not exist in the traditional definition of currency as equal units that can be exchanged and value is preserved.

The paradox in Lebanon from other countries is that escaping from the lira to digital currencies has no advantage compared to resorting to buying dollars to save the value of money, except that digital currencies facilitate the transfer and smuggling of cash abroad.

Accordingly, the journalist specializing in economic affairs, Imad Chidiac, considers that Lebanon is facing an actual phenomenon of trading in digital currencies, without constituting an alternative to the dollar, but rather the global wave in terms of “young people’s entertainment, unemployment and ambition for quick earning”, after the losses caused by the lira.

He believes that it is like a process of seeking to compensate for losses, through exchanges in amounts that are not huge, and what is happening at present – in his opinion – is that digital currencies are a commodity in themselves, rather than a means of barter, and the danger is that their value is measured by the size of people’s turnout, with speculation up and down.

Chidiac stresses the difficulty of determining the level of Lebanese circulation, and the turnout is measured by tracking groups on Telegram, Facebook and Tik Tok, and the size of followers and those interested.

He said – to Al Jazeera Net – that the wave of digital currency trading in Lebanon is at its beginning and it is chaotic, and some find it the future of currencies.

Is there a link between cryptocurrency trading and Lebanon’s economic and financial crisis?

Chidiac answers certainly, linking this to several reasons, including:

  • The money has become circulating in cash in the hands of the Lebanese, not in the banks, and the rush to digital currencies has only strengthened the search for a way to save money instead of placing it in banks, and the preservation of paper currency in electronic units.
  • Lebanon’s banking crisis and the rise in the dollar’s exchange rate created a psychological factor in making it easy for some to venture with part of their money after they lost a lot after saving it using traditional methods.
  • The global media momentum to talk about the positives of cryptocurrencies, and only talk about the negatives by bankers and their testimonies is weak because it is in favor of the banks’ point of view.

The losses of the Lebanese financial system in banks were previously estimated at $83 billion.

Here, researcher and banking risk expert, Muhammad Fahili, considers that after the Corona pandemic and people’s focus on online communication, the involvement in the world of cryptocurrencies increased, as it attracted those who were surprised by the rise in the value of Bitcoin, and sought to invest in cheap digital currencies, hoping for its value to rise.

The expert warns against the involvement of the Lebanese in this field, “because digital currencies facilitate money laundering and smuggling between countries without supervision due to the secrecy of their movement.”

There was talk recently about the Lebanese losing millions of dollars as a result of trading in digital currencies. Fahaili considers that these numbers are exaggerated, because “many individuals have invested with little amounts of money that did not exceed $300 per person.”

Fhaily states that digital currency platforms in Lebanon – like most countries – are not regulated and their existence is not legalized, “that is, they are exposed to embezzlement and it is difficult to prosecute and hold perpetrators accountable.”

The expert explained that the economically encrypted currency is called “digital assets” and does not have the specifications of the currency, and “purchasing it requires the availability of the cash dollar.”

And between the cryptocurrency and the lira, there is a credible currency, which is the US dollar, according to Fahaili; He pointed out that the Lebanese citizen is looking for liquidity, “even gold and metals do not give him the liquidity he wants, because they require the availability of the cash dollar, which is scarce in the markets.”

The expert warns the Lebanese against trading in cryptocurrencies, given the price fluctuations, and the investment can be lost easily, “if a technical malfunction occurs that impedes one’s access to the currency basket in circulation, or if the electronic password is lost or forgotten,” and said that the intensity of digital currency mining, causes a decline. sharp in value.

He considers that the suffocation of the Lebanese economy – due to the lack of confidence in the banking sector – doubled the demand for digital currencies. However, banks – in his opinion – remain the wheel and engine of the economy, as there is no economy without banks, the International Monetary Fund and all donors deal with Lebanon and all countries across the sector. Banking exclusively.



Reference-www.aljazeera.net

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