Lebanon’s central bank has become the latest monetary regulator to move towards the launch of a central bank digital currency (CBDC) and is planning for a launch next year.
According to a report by the local National News Agency on Tuesday, the initiative of the central bank was confirmed by its governor, Riad Salameh. He believes that this move will reinstate public confidence in the Lebanese banking industry and transition into a cashless system.
Lebanon’s economy is currently in crisis, and the ties of private banks with its government also created chaos as the country defaulted on its debts in March. The governor pointed out that the Lebanese citizens now store around $10 billion in cash in their homes.
“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,” Salameh told the local news.
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The monetary regulator’s plan to introduce a digital currency is not an abrupt one as the governor already revealed in mid-2019 that the central bank is working on such a project.
CBDC Is a Priority Now
After a decade of the introduction of the concept of digital currency, many major central banks are now actively researching this field and making plans for real-world testing. Though many smaller economies have already launched versions of their digital currencies, China is the only major one to complete the development and is initiating a full-fledged plan to test the digital yuan.
Similar to Lebanon, other struggling economies are also moving towards digital currencies. Venezuela, a country seeing hyper-inflation, launched its own oil-backed digital currency to circumvent the international sanctions, and the government is now aggressively pushing to make it mainstream.