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The original was posted on /r/cryptocurrency by /u/observerishh on 2023-08-11 15:27:31.
The Lebanese economy is currently going through a devastating liquidity crisis. It is practically impossible to acquire foreign exchanges in the country. Starting in 2019, the economic hardship in Lebanon deepened due to COVID-19 and the 2020 Beirut explosion. As a result, the GDP per capita dropped by over 35% only from 2019 to 2021, according to the World Bank. The liquidity crisis worsened even more over the last two years due to the mismanagement of the economy and increasing inflation - currently over 250% - and Lebanese currency was officially devaluated by 90% -15,000LL per USD as of 2023 But even the new rate felt behind the rates in the black market, which surpassed 100,000LL per USD this year.
Due to the foreign exchange crisis, the banks set limits for withdrawals from dollar deposits. However, under harsh economic conditions, impoverished individuals demanded their money back from the banks. Unable to cash out their money, some Lebanese committed armed bank robberies from 2022 onwards to take back their savings.
We have to acknowledge that such situations are unlikely in most countries. But the bank robberies in Lebanon are friendly reminders that the banks might be unreliable under extreme conditions of economic crisis, high inflation, and lack of funding. More relevant to our world, centralized cryptocurrency exchanges are very vulnerable. As we all know, FTX and similar cases ended up with the loss of funds by depositors. Therefore, we can take these extreme cases in Lebanon as a reminder of the significance of self-custody of your crypto assets. You can only rely on the assets you hold in your hands. Not your keys, not your crypto.