Saturday, October 1, 2022

Lebanon to launch digital currency in face of economic and financial turmoil


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.

“As for the monetary supply in the Lebanese market, it is estimated that there are $10 billion stored inside homes,” Salameh said, according to the state-run National News Agency.

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 gross domestic product, according to the World Bank. That figure was as high as 26.4% in 2004.

Salameh says Lebanon will maintain its gold reserves as a hedge against a wider market crisis. If such a crisis occurs, the central bank can liquidate its bullion on foreign markets for immediate relief.