Lebanese central bank plans to launch its central bank digital currency (CBDC) in 2021. The central bank governor, Riad Salameh, revealed the plans during a meeting with other central bank officials on the 9th of November.
In a speech, the central bank governor noted that Lebanon residents are storing $10 billion in their homes instead of the banks. Hence, Salameh said there is a need to set up regulatory mechanisms to boost residents’ trust in financial institutions. He added that “a Lebanese digital currency project” would also help the economy of the country.
The governor believes that the launch of a digital currency would help counter the ongoing financial crisis in Lebanon. In case of a wider financial crisis in the country, Salameh said:
“Lebanon does not have any natural resources, and we must keep gold because it is one of the assets that can be liquidated in foreign markets if we are faced with an inevitable fateful crisis.”
Before now, Lebanese commercial banks imposed capital controls on customers to restrict the flow of foreign currency. In reaction, customers moved to withdraw their funds at the official exchange rate. Aljazeera reported that a major bank limited withdrawal to just $400 per month at the time.
In the same period, citizens reacted, and there was civil unrest across the country, leading to the immediate closure of banks.
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