How Bitcoin Fits Into Lebanon's Banking Crisis

Lebanon's financial crisis has banks looking for alternative monetary policy and citizens scrambling for alternative banking services.

As a result, more Lebanese people are seeking information about bitcoin, which is relatively cheap and accessible compared to the fractured banking system.

This is why some people are using bitcoin to buy black-market dollars to pay off their bank loans cheaply, said bitcoin researcher Matt Ahlborg.

Most LocalBitcoin traders get their bitcoin by using bank accounts outside of their country of residence and use the local listing as a type of advertisement.

Attorney Charbel Choueh, partner at Choueh Law, said his firm is the first in Lebanon to accept both tether and bitcoin from clients abroad."The bitcoin coming into the country is coming from the freelance market plus a little bit from poker people and remittances," Ahlborg said, referring to how most newbies use social networks to find bitcoin veterans rather than rely on exchanges.

Social networks have essentially become grassroots financial networks without banking restrictions, relying on global currencies like dollars and bitcoin.

In a country that's already dealing with a central bank that struggles to prove its independence from political factions, Mardini said he worries that the restructuring of the banking system in Lebanon would create more distrust in banks.

"If you let the government do the restructuring, they would put their hand on the banking sector - the crown jewel of the Lebanese economy," Mardini said.

Currently, Gayfield is looking at having importers send crypto to a company that Gayfield and Mardini would headquarter in Malta, converting that crypto to fiat, and using that fiat to pay international suppliers and curtailing the banking system.

Users are also not allowed to buy bitcoin in Lebanon with a credit card, and banks have set limits on withdrawals.