Inside Lebanon’s Currency Crisis: What Hyperinflation Feels Like

Lebanon is back in the headlines as the Middle East conflict intensifies. Before these latest developments, Lebanon had already become a symbol of how quickly a seemingly stable society can descend into chaos.

If you follow major events in the global economy, you will probably remember that Lebanon’s recent past serves as a vivid example of what a total currency collapse looks like in a modern, advanced economy. While there are some great books that describe hyperinflation in academic, detached terms, what’s often missing is the human story—what it’s actually like to be a normal, productive person with a family and a bank account and live through your crash. the currency of the country.

I’ve known for some time that my friend Tony Yazbeck, co-founder of The Bitcoin Way, has experienced this reality. But it wasn’t until I watched this interview with him that I realized how valuable his story is for everyone to hear. Tony’s story offers a rare, personal look at what it means when your country’s banking system collapses, when you lose access to your savings, when food prices increase 10-fold in a matter of months, and when even basic necessities such as medicine and fuel, become luxuries. .

I asked Tony if he could explain not only why Lebanon collapsed, but also how bitcoin could have been a lifeline in such a dire situation.

Lebanon: A country on the brink

Before the economic collapse, Lebanon was a vibrant, cosmopolitan country, often called the “Paris of the Middle East”. Its economy has thrived on banking, tourism and services, positioning it as a bridge between East and West. For Tony, this prosperity was not an illusion, but his everyday life. “My life in Lebanon was extraordinary,” he recalls. “I ran three thriving businesses and lived a luxurious lifestyle. Whether it was the latest cars, the best restaurants or the hottest clubs, Beirut had it all.”

However, cracks were forming beneath the surface. Lebanon’s banking sector, once a source of pride, was built on unsustainable practices and the country was drowning in debt. For years, Lebanon’s central bank has pegged the Lebanese pound to the US dollar at an artificially high rate, creating a false sense of stability.

To maintain itself, this currency peg required constant inflows of dollars. When these inflows dried up, the house of cards collapsed.

In 2019, banks in Lebanon began restricting access to savings by imposing informal capital controls without any legal framework. “Overnight, people lost access to their funds,” says Tony. “You couldn’t withdraw your money, and even if you could, it was in Lebanese pounds which were rapidly losing value.”

For those unfamiliar with a currency crisis, limiting bank withdrawals is one of the first signs that the system is failing. The government and the banks are trying to delay the inevitable by blocking dA look at the lived experience of going through hyperinflation in Lebanon. own money in the system. By then, it’s too late.

From thriving business to $70 in hand

In early 2020, Lebanon went into default and the value of the Lebanese pound fell. Hyperinflation set in, destroying the purchasing power of ordinary people.

Tony watched helplessly as his savings evaporated and his businesses collapsed. “I went from being a successful entrepreneur to only having $70 to my name in the blink of an eye,” he recalls. “I couldn’t pay rent, school fees or even afford basic food.”

Hyperinflation took hold with shocking speed. “A loaf of bread that once cost £1,500 went up to over £30,000 in a matter of months,” explains Tony. Fuel prices were even weaker. “In early 2023, a gallon of petrol went from 25,000 LBP to over 500,000 LBP in just a few weeks. It was impossible to keep up with the prices.”

The destruction was not limited to material wealth; the psychological toll was immense. Tony describes the anxiety and panic that came with watching his hard-earned success disappear. “For the first time in my life, I didn’t know what to do. I felt completely helpless.”

A fractured civil society

As Lebanon’s currency collapsed, so did its social fabric. People who once lived comfortable, middle-class lives suddenly found themselves fighting for survival. Basic goods became scarce and the price of everyday items skyrocketed.

Power dynamics within communities changed as those who controlled essentials such as food and fuel gained disproportionate influence. “There were reports of gangs taking over neighborhoods, controlling access to property and demanding protection fees,” Tony recalls.

Even electricity has become a luxury. With the national grid in ruins, most people had to rely on private generators, but the cost of running them was astronomical. “Monthly generator fees went from LBP 200,000 to over LBP 4,000,000,” explains Tony. Many families were forced to live without power for long periods of time.

In response to the crisis, people turned to alternative forms of exchange. Barter has become common, people directly exchange goods and services. “If you couldn’t pay in cash, you could offer plumbing work in exchange for food,” says Tony. The US dollar, already widely used before the crash, became the default currency for many transactions. Digital currencies, and especially stablecoins like Tether (USDT), also gained ground as people looked for ways to keep value outside of the collapsing banking system.

What Could Have Been: Bitcoin as a Lifeline

As Tony recounts the crash, the questions loom large: Could this have been prevented? Or, at the very least, could individuals have somehow protected themselves better? For Tony, the answer is clear: Yes – with access to bitcoin, many of the worst effects of the crisis could have been avoided.

“If I had known about bitcoin before the crisis, it could have saved me,” Tony says without hesitation. “Bitcoin would have given me a way to store value outside of the banking system, which has completely failed. I wouldn’t have been locked out of my own savings and could have kept my wealth as the Lebanese pound collapsed.”

Bitcoin is immune to the type of capital controls imposed by banks in Lebanon in 2019. No government or bank can freeze your bitcoin or restrict access to it. In a country where the banking system has become a trap, bitcoin would have offered a way out.

Even though Lebanon’s currency has lost more than 90% of its value, bitcoin has retained its purchasing power globally. “Bitcoin is not tied to any government or central bank, so it cannot be manipulated like the Lebanese pound was,” explains Tony. “It’s a hedge against hyperinflation, which would have been critical when prices were doubling and tripling every few months.”

Bitcoin’s status as a digital bearer asset would have been equally important. “When cash becomes worthless and banks go out of business, how do you pay for things? How do you trade?” Tony asks.

In Lebanon, barter and informal exchanges became necessary for survival. In many situations, bitcoin can serve as a viable alternative to barter, worthless Lebanese pounds, and US dollars that were hard to come by.

Lessons for the world

The crisis in Lebanon offers a stark warning to the rest of the world. While many people in developed countries believe their economies are too stable to collapse in this way, Tony’s experience should give us pause. “What happened to me can happen to me anywhere,” he warns. “Don’t think you’re immune just because you live in a so-called stable country. The mechanics of fiat currency are the same everywhere”.

Tony points to the US as an example of a country going down the same dangerous path as Lebanon. “The US national debt now exceeds $35 trillion. Since 1971, when the dollar was taken off the gold standard, the money supply has grown by over 8,000%. This kind of money printing cannot go on forever.”

While the US benefits from being the issuer of the world’s reserve currency, this status is not guaranteed indefinitely. “All fiat currencies go to zero eventually,” warns Tony. “Some will fail sooner than others, but all will fail. The US dollar may be the last to go, but its turn is coming.”

The lessons from Lebanon’s collapse are clear: protect your wealth before a crisis hits, and don’t assume the government or banking system will be there to bail you out when things go south. For Tony, that means turning to bitcoin. “Bitcoin is the only asset that isn’t really confiscated,” he says. “It’s the only way to escape a broken system.”

A new mission to rebuild with bitcoin

Following the collapse of Lebanon, Tony dedicated his life to helping others avoid the same fate. He founded The Bitcoin Way, a bitcoin education and technical services business designed to teach people how to use bitcoin to protect themselves from currency crises. “The crisis forced me to study and understand money,” says Tony. “I realized that the fiat system is a scam, designed by thieves to steal and control us. Bitcoin is the solution.”

Every day, Tony educates his clients on how to take control of their financial future using bitcoin. “Once you understand how bitcoin works, you see the flaws in traditional fiat systems,” Tony explains. “Learn how to manage your assets safely, transact independently of banks and protect your wealth from inflation and economic instability.”

The road ahead

Tony believes the collapse of the Lebanese pound was avoidable, but that would have required structural reforms that never came. “If Lebanon had tackled corruption, maintained transparency and responsibly adjusted the currency peg, things might have turned out differently,” he says.

But given the deep-rooted corruption in Lebanon’s political and financial systems, collapse was all but inevitable.

As Tony reflects on his experience, he sees parallels between pre-crisis Lebanon and the current state of many developed economies. “We have the same problems – rising debt, unsustainable monetary policies and corrupt institutions,” he says.

The warning signs are there, but many people ignore them, thinking that their country is somehow different.

For those who are paying attention, Tony offers practical advice. “Start educating yourself about bitcoin now, before it’s too late,” he urges. “Diversify your assets and don’t rely on fiat currency to hold your wealth. The hyperinflation mechanism doesn’t change just because you live in a rich country.”

Lebanon’s collapse is not just a cautionary tale for people living in developing economies. It is a wake-up call for the whole world.

As governments continue to print money at unprecedented rates, the risk of a global currency crisis increases. Bitcoin offers a way out – an inflation-proof alternative that can protect individuals’ wealth when fiat currencies fail.

Tony’s experience is a stark reminder of the fragility of fiat systems and the importance of financial sovereignty. “With bitcoin in your custody, you have the power to protect yourself from corruption, manipulation and inflation,” says Tony.

“You don’t need permission from a bank or government to manage your own money. And that’s what makes bitcoin the ultimate tool for financial freedom.”

This is a guest post by Dave Birnbaum. The opinions expressed are entirely our own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.