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Lebanon’s underground cryptocurrency market

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Re: Lebanon’s underground cryptocurrency market

#51

Post by graeme »

nl wrote: post #28
mathgenius wrote: post #2

I guess that a similar story could have happened to Greece. Nice to hear that crypto is helping people in such dire need of economic stability, although it was not clear from the article what happens to the lebanese cash that was used to purchase USDT. Someone must be left holding the bag, there must be some FX liquidity that they tap into?

> it was not clear from the article what happens to the lebanese cash that was used to purchase USDT They are purchasing using hard cash (ie USD) outside Lebanon and then transferred there. The article is a bit confusing but this is the key bit: An agent in Nigeria will collate these sums, buy USDT, and send it to one of the top-level suppliers in Lebanon. Once they have sold it on, they will disburse cash to the ori…

Is crypto involved in any way, or is it just USDT, a centralized USD token, on centralized exchanges?

I guess the agent probably has to buy bitcoin and exit if on some dollar offramp to get actual USD to give the family.

Re: Lebanon’s underground cryptocurrency market

#52

Post by aazaa »

> That’s when Lebanon’s cryptocurrency market took off, along with the OTC system run by traders like Awad. The OTC ecosystem here largely operates using Tether, a cryptocurrency pegged to the U.S. dollar and therefore subject to fewer price fluctuations. The process works like this: A client who wants to buy cryptocurrency will usually open a wallet on an exchange (the most popular in Lebanon being Binance) and then meet with an OTC dealer to hand over cash dollars. The dealer will send the same amount of Tether — minus a commission ranging from 0.5%–5% — to their account via a peer-to-peer transaction. The client can then pursue whatever crypto-investment strategy they see fit with the USDT in their digital wallets.

From the frying pan (domestic currency in shambles), into the fire (crypto waiting to implode).

Tether's many problems have been documented elsewhere. What this implies is that the funds being spent by the Lebanese in this story are very likely going into financial speculation, not day-to-day requirements like buying food. And they're using the absolute worst vehicle for doing that.

A ticking time bomb.

Re: Lebanon’s underground cryptocurrency market

#53

Post by singularity2001 »

disruptalot wrote: post #24
aorth wrote: post #21

Earlier quoted context omitted.

How is it different? How many goods and services can you pay for with cryptocurrency where you live? What if your government's goons (or private goons for that matter) hit you with a rubber hose and steal your coins? Who will help you?

You don't need to buy goods and services directly but it is a good way to store and invest your wealth. Most capital controls are mute once you've exited into crypto. On what basis do they hit you? Anyone that ever has any link to crypto? That's everyone. Crypto has a level of security and plausible deniability, that makes such things unrealistic. That's why you don't hear about it happening often. To many people und…

>>> it is a good way to store and invest your wealth

until it goes to literally zero, which IMHO seems more likely every month

Re: Lebanon’s underground cryptocurrency market

#54

Post by BallyBrain »

aazaa wrote: post #52

> That’s when Lebanon’s cryptocurrency market took off, along with the OTC system run by traders like Awad. The OTC ecosystem here largely operates using Tether, a cryptocurrency pegged to the U.S. dollar and therefore subject to fewer price fluctuations. The process works like this: A client who wants to buy cryptocurrency will usually open a wallet on an exchange (the most popular in Lebanon being Binance) and then…

I think it's wrong to assume its just speculation. Lebanon is a troubled country, and if I've heard correctly their local currency is inflating. So they could just be trying to protect their savings (earned from their labor in many cases no doubt) from being devalued. Perhaps they also want it protected by government confiscation. The might also just keep their funds in USD stable coins (tether is not the only one).

Re: Lebanon’s underground cryptocurrency market

#55

Post by celticninja »

csomar wrote: post #39
notimrelakatos wrote: post #32

Earlier quoted context omitted.

Not paying taxes to a corrupt managerial elite is one of them

Most of these countries finances are based on direct unavoidable taxes as they are already struggle to collect taxes the western way due to low compliance.

What's the western way? Don't you mean the US way?

In western Europe most places tax at source, which means your wages are taxed before they are sent to your bank. This sort of direct taxation ensures more compliance. I think rather the issue is that many places will deal in cash, where it is easier to avoid tax.

Re: Lebanon’s underground cryptocurrency market

#56

Post by phatfish »

plantain wrote: post #22
landemva wrote: post #18

Earlier quoted context omitted.

Businesses in the developed world pay visa and mc and amex close to 3%.

I wish it was that low, once you account for forex + intermediate processor fees. More like 4-5%.

Fees seem to be capped in the EU since 2015. 0.3% to 1.9% depending on the transaction.

https://www.mastercard.co.uk/en-gb/vision/terms-of-use/Inter...

Re: Lebanon’s underground cryptocurrency market

#57

Post by Tangokat »

counternotions wrote: post #12

There’s always that one guy: > “That’s my reputation,” Baasiri said. “Gravity fucks the market.” 5% commissions on transactions though, that’s really steep!

It's supply and demand. Nobody wants cash, everyone wants cryptocurrency.

Re: Lebanon’s underground cryptocurrency market

#58

Post by PoignardAzur »

thedmstdmstdmst wrote: post #46
PoignardAzur wrote: post #26

Earlier quoted context omitted.

> Have there been successful cases of countries with private infrastructure? Infrastructure generally starts out private and gets nationalized over time.

Are you sure it doesn't go the other way?

Yes, I am. As an example, the French public retirement pension system was built after WWII from a multitude of private pensions that were put in place over decades by various unions/corporations/guilds.

Privatizations also happen, it's not an irreversible process, but over a scale of centuries I think the tendency is towards nationalization of utilities. (Though the US is an outlier in how little it nationalizes)

Re: Lebanon’s underground cryptocurrency market

#59

Post by jt2190 »

The article has a numerator but not a denominator:

> Accurate data on the overall volume of cryptocurrency trading in Lebanon is all but impossible to obtain, due to the informality of the market. Demand fluctuates with the rise and fall of the global cryptocurrency market, but OTC suppliers estimated trading volumes across Lebanon of up to 10 million dollars per week at high points

So… 10 000 000 USD moving via crypto per week of i USD total currency movement per week.

Without this number it’s hard to tell if this is a significant new trend, or just fringe.

Re: Lebanon’s underground cryptocurrency market

#60

Post by xur17 »

EliRivers wrote: post #50
csomar wrote: post #37

Earlier quoted context omitted.

> How is it different? You don't get 50% dilution of your savings within a year. > How many goods and services can you pay for with cryptocurrency where you live? In a liquid market, you can convert your weekly needs and pay using cash. > What if your government's goons (or private goons for that matter) hit you with a rubber hose and steal your coins? If they are going to do that (and some countries do that), they'l…

You don't get 50% dilution of your savings within a year. Although if you're measuring bitcoin against the USD, you could have done that in May :)

BTC isn't the only option if you are using crypto. Especially in emerging markets, stablecoins seem to be a popular choice.
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