Lebanon’s CBDC: Just a Desperate Try?12. November 2020
According to the national news agency, Lebanon is also specifically concerned with CBDC plans. The background: inflation in the country is high, as is the mountain of debt.
Efforts by central banks to launch digital national currencies (CBDC) are now being made around the globe. China in particular is very far ahead in an international comparison. Now there is another candidate, Lebanon, who has entered this race. The US news agency Bloomberg reported, citing the national news agency of Lebanon, that the digital currency is intended to strengthen “confidence” in the country’s banking system.
The national news agency of Lebanon quotes Governor Riad Salameh:
Lebanon has no natural resources and we must keep the gold because it is an asset that could be liquidated in foreign markets if we face an inevitable, fateful crisis
The project should also according to other media reportsto be launched in 2021. Salameh already mentioned in 2019 that Lebanon was planning a Crypto Revolt project. At that time, the aim of the project was to provide the local economy with a purely cashless transaction system. At the time, however, concerns about money laundering and security had not yet been addressed.
Lebanon has been thinking about CBDC for some time
Last OctoberParliament in Lebanon passed a law on electronic transactions and personal data. Article 61 of this law contains the first official mention of “electronic and cryptocurrencies” in a case law text. Parliament evaded this question by giving the central bank full responsibility for establishing a legal framework for these currencies.
The Lebanese pound is currently struggling with drastic inflation. Lebanon is one of the most heavily indebted countries of all. Against this background, the effort to spread a CBDC appears to be a more or less desperate attempt to stop this downward trend.
The situation in the North African state is nowhere near as dire as it is in Venezuela . There the bolívar often sinks in the course of the day and leads a more or less worthless shadowy existence. The success of the Petro, the oil-backed Venezuelan digital currency, is also a long time coming.
As of October, the Bahamas became the first state in the world to officially and comprehensively issue a CBDC. The 393,000 inhabitants of the island state can thus fall back on the “sand dollar” baptized currency. It is pegged 1: 1 to the Bahamian dollar, which in turn is pegged 1: 1 to the US dollar rate.