Lebanese central bank has concluded plans to roll out its digital currency next year. The country’s central bank will become the latest monetary regulator to make a move towards the launch of a central bank digital currency (CBDC).
This initiative was confirmed by the country’s central bank governor, Riad Salameh, and reported by the local National News Agency.
According to Salameh, the decision to launch a CBDC will reinstate public confidence within the country’s banking industry, as it moves into a cashless economy.
Lebanon facing one of the worst financial crises since independence
Lebanon is facing one of its worse financial crises since its independence in 1943. The coronavirus pandemic as well as the Beirut port explosion in August has made matters worse. Its public debt has grown to around 150%, making it one of the worst in the world. Although the country is undergoing its central bank audit, many observers say it will be a massive challenge to turn things around in the financial sector.
However, the central bank is poised to make the country return to a stable financial situation by introducing several policies. The introduction of a CDBC is viewed as one of the policies that can spur a return to a more balanced financial situation. The idea is to induce more financial participation and improving the liquidity of funds.
When the government defaulted on its debt in March the Nanking sector gradually started alienating the government. The gap between the private sector and the government became wide such that many people have decided to store their funds at home rather than deposit them in the bank. The central bank governor reported recently that Lebanese citizens now have more than $10 billion
