The imminent economic collapse in Lebanon which the Lebanese Central Bank Governor has warned of may be averted as Prime Minister Saad Hariri announced his resignation amid the country’s largest protests in 15 years.

These protests were in response to Hariri’s government announcing austerity measures which included a tax on WhatsApp calls. Protesters demanding Hariri’s resignation and widespread demonstrations resulted in the closure of banks across the country in an attempt to prevent a bank run.

This left millions of Lebanese citizens and businesses without access to money which prompted the Governor’s prediction. It is unclear when the banks will open again, as many fear a bank run regardless of Hariri’s resignation. A bank run in Lebanon would echo that of Cyprus in 2013.

Many point to these events as signifying the dawning of the era of cryptocurrencies, as instability and the lack of trust in institutional frameworks triggers widespread demand for alternatives which would offer immunity from political manipulation.
The news of a potential economic collapse was heralded by digital finance enthusiasts as a moment for these assets to shine; millions of individuals face the inability to access their own finances due controls by centrally regulated lenders, which have rendered individuals’ finances practically non-existent.

By employing digital assets based on a commonly shared and transparent ledger, users can access their own finances when they need to, free from government manipulation. Commentators noted an increase in the use of bitcoin as a result of this crisis, however bitcoin has its own problems. Bitcoin is a notably volatile digital asset which may dissuade users in countries like Lebanon from accessing it. 

See related article: Can Digital Currency End Japan’s Economic Malaise?

In recent years, stablecoins have been developed to provide an increased level of stability, however many of these are tethered to fiat currencies which face their own volatility, as is evident in Lebanon. These issues have resulted in the development of the Anchor stablecoin (ANCT) by Anchor AG, a financial services company based in Zug, Switzerland.

Anchor is an algorithmic stablecoin pegged to global economic growth. Unlike most major fiat currencies which tend to depreciate, global GDP has expanded from $1.3 to $80.7 trillion since the 1960s, indicating a sustainable index that offers long-term price stability and steady appreciation over time.

Lebanon is poised to experience further political uncertainty amid Hariri’s resignation. While the situation develops, questions will continue to be raised about the country’s economic future, which may lead the Lebanese government to securing a viable solution, such as adopting a stable and decentralized digital financial product as their sovereign currency. 

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Daniel Popa
Daniel Popa is a serial entrepreneur with over 20 years of experience successfully launching numerous telecommunications and software companies, including NECC Telecom, Pulse Telecom, ECS Soft, CCI, TimeWalk, and others. Companies founded by Daniel have generated over $1 billion in revenue over the past 20 years and currently operate in 5 different countries, including the USA, Canada, Australia, Romania, and Ukraine. NECC Telecom employed more than 600 people and several thousand contractors around the world and earns revenues in excess of $54 million annually. Daniel and his team of PhD-level academics have been developing the algorithm behind the MMU since 2017. Daniel is currently the Founder & CEO of Anchor AG -- established in 2018 in Zug, Switzerland, Anchor AG is the financial services company behind Anchor, a two-token, algorithmic stablecoin pegged to the sustainable and predictable growth trend of the global economy. Anchor offers token users long-term price stability, preservation of purchasing power, and protection against inflation. With many more projects and developments underway, Anchor AG is dedicated to help pave the way for mass adoption of cryptocurrencies with a commitment to long-term price stability and developing real-world use cases.