Lebanon's central bank plans to launch a new digital currency in 2021 as part of a broader effort to combat a parallel economic and financial crisis that has engulfed the country.
Central bank governor Riad Salameh told a gathering of officials Monday that "We must prepare a Lebanese digital currency project" as a way to shore up confidence in the banking system.
The central banker added that a digital currency project launched in 2021 will help implement a cashless financial system to enhance the flow of money locally and abroad. Lebanon relies heavily on remittances from its vast global diaspora.
In 2019, personal remittances represented nearly 14% of Lebanese GDP, according to the World Bank.
If such a crisis occurs, the central bank can liquidate its bullion on foreign markets for immediate relief.
Banque Du Liban, the country's central bank, has been kicking around the idea of a state-run digital currency since at least 2018.
Efforts appear to have accelerated earlier this year after violent protests and silent bank runs brought Lebanon's financial system to a halt.
Faced with a dollar crisis, banks tightened restrictions on foreign currency transactions, with at least one major institution limiting withdrawals to just $400 a month.
A plunging Lebanese lira made it almost impossible to transact in the local currency.
In June, protestors set fire to the central bank in Tripoli in a show of anger over the collapse of the lira, which had long been pegged at 1,500 per U.S. dollar.
Lebanon to launch digital currency in face of economic and financial turmoil
Published on Nov 10, 2020
by Cointele | Published on Coinage
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