Cryptocurrencies have evolved into something more, than just a payment system. Recent times have seen cryptocurrencies being used by the people to break the shackles of regulatory control over us and our wealth. Digital privacy is a costly luxury these days. Cryptocurrencies and blockchain technology has been making it easy for the masses to achieve anonymity.
The latest Many suggest that Bitcoin could be a global hedge in the face of a potential global economic recession, especially when its price started rising on negative news for the world economy. However, now more than ever, for citizens of embattled countries, ‘Bitcoin’s value truly shines.
Lebanon turns to Bitcoin
The citizens of Lebanon are the latest to turn towards bitcoin in efforts to beat restrictions placed by the government on cross-border money transfers.
As per a report from the Middle East Monitor, the Lebanese people are increasingly using bitcoin to move money in and out of the nation during a time when the nation is going through an economic crisis which is said to be the worst since the end of the civil war in 1990.
The people have lost faith in banks and financial institutions after the anti-government riots swept across the entire nation. This further led the banks to impose restrictions on the account holders by limiting weekly withdrawals. To prevent money from leaving the nation, banks also put limitations on international spending. According to Parliamentary Speaker Nabih Berri, owners of five large banks have transferred $2.3 billion of “personal money” abroad between October 2019 and February 2020.
Furthermore, the nation also ran out of dollars back in September which pushed the black-market exchange rates as high as 2,437 lira per dollar, which is originally priced at 1,507.5 lira. According to news outlet Actionable Insights, approximately 65 percent of Lebanese money is in banks, leaving two-thirds of the country cut off from personal funds.
Despite being inactive about virtual currencies, the above scenario has fuelled the rise of decentralized money and bitcoin has been at the forefront of it. The decentralized nature of bitcoin gives people more control over their wealth and easily transfer it to any place across the globe. With much Lebanese living abroad, people have been forced to be more creative with their money.
More recently, the attacks in Iran and on US bases saw the price of Bitcoin spike in time with Gold which again profited from the tensions. The heavy premium on Bitcoin at the local peer-to-peer marketplace was from Iranians looking to exit the national currency.
Ripple using XRP for US-Mexico transfers
While these were cases of bitcoin acting as a last resort for people suffering from the economic recession, some places are already seeing cryptocurrencies being used on a daily basis for cross-border settlements.
According to a recent report by The Daily Chain, Ripple has moved 7.5% of total transactions in-between the US and Mexico in a week. The company has been moving 10% of MoneyGram’s total transaction volume between the United States and Mexico using Ripple’s ODL. With ODL us, the company processed $54 million worth of transactions from the US to Mexico in the first week of February.
This feat was achieved with the help of Mexico-based crypto exchange Bitso that partnered with Ripple to facilitate XRP settlements into the country and the exchange is now processing 10% of MoneyGram’s flows into Mexico using XRP. Bitso’s volumes derive from the activity of MoneyGram, which already uses XRP for 10% of its transfers.