Lebanon’s banking system has been in shambles for quite some time, with closures across the country. Now, the banks are ready to reopen, but they are opening with a caveat. Without calling it Capital Controls, Lebanese banks have set a withdrawal limit of $1,000 a week for accounts denominated in foreign currency.
The move is intended to control the flow of new money coming in from abroad and clearly plays a harsh and restrictive role in allowing people access to funds from outside the country. And, while this sounds expressly like Capital Control, the banks are adamant that it is not and will be done in association with the central bank.
This ongoing financial crisis and limitation of power on one’s own finance again paints an expressly promising picture for Bitcoin as a decentralized and global system. Not only is Bitcoin not affected by banking shut down and closures, but it is also intended to be borderless with there being a minimal barrier to sending and receiving money from across the world.
Big Banking Blunders
It is easy to spot issues with banking systems across the globe at the moment. With a recession seemingly looming, banks have been kicked into overdrive to try and fight this with specific economic policies. More so, banks have been under pressure in other countries because of geopolitical turmoil.
In Hong Kong, under threat from protests, the banks have started running out of money in their ATMs. This issue has had a direct correlation to increased Bitcoin trading. Then, in India, a nationwide crackdown on banking fraud was recently enacted as the Central Bureau of Investigation (CBI) swept 190 locations.
Lebanon has been having these long periods of bank closures, which is made all the more damaging by the fact that the Lebanese are probably overbanked. Relative to the economy, Lebanon’s banking system is the Middle East’s biggest, and one of the biggest in the world.
A Perfect Opportunity for Bitcoin
With the nation depositing more than 150 percent of bank assets as a share of its GDP, according to World Bank data on Bloomberg, there is a situation brewing that is ripe for Bitcoin. Being so heavily overbanked means there is a strong reliance on the banks, but with the previous closures lasting nearly a month, there is bound to be huge frustration.
With this frustration, and now the added unofficial capital controls, citizens will surely be turning to alternative financial systems, such as Bitcoin. Bitcoin offers them almost immediate relief from these two strong decisions to control people’s own finances.
Images are courtesy of Shutterstock.
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