The development and issuance of digital currency have become the latest topic of interest for banks and governments across the globe. While preparations to roll out central bank digital currencies [CBDC] have been going on in full swing, Lebanon seems to have hopped on to the bandwagon.
Lebanon Joins The Digitalisation Bandwagon
The pandemic has insinuated the disruption of many economies. With an intention of letting go of the shackles formulated by the virus, several governments have been speeding up the process of digitalization. Lebanon is the latest to reveal its plan. The central bank of Lebanon declared that the country would launch a new digital currency in 2021.
In a recent meeting by the Lebanese Depositors Association and the Governor of the Banque du Liban, Riad Salameh, several factors pertaining to the economic conditions of the country were addressed. The Governor pointed out that there was a restraint in the flow of foreign capital following the emergence of Covid-19. While stressing the fact that Lebanon was not a bankrupt country, the governor suggested that its economy still had to bear the brunt of the regional crisis in the country.
Speaking about the same, Salameh added,
“Lebanon doesn’t have any natural resources and we have to keep the gold because its an asset that could be liquidated in foreign markets if we face an inevitable, fateful crisis.”
To address all of the aforementioned issues, the central bank governor suggested that the launch of a digital currency could spruce up confidence in the banking system of the country. Back in 2019, the governor had proposed the idea and even revealed that a digital currency project was underway. However, this project went from being a mere cashless transaction scheme to tackling potential financial crises. He further detailed,
“As for the monetary mass in the Lebanese market, it is estimated that there are 10 billion dollars stored inside homes, which requires setting up a new regulatory mechanism to restore confidence in banks, including preparing a Lebanese digital currency project, during the year 2021, that will help implement” SYSTEM. ” CASHLESS, which allows moving the money market locally and abroad.”