Doing Crypto in a Failed State

The definition of a failed state says that a country's political or economic system has become so weak that the government is no longer in control.

Lebanon is a country in Western Asia, located between Syria and Israel. Its population of around 7 million is fighting to survive live every day.

In this article Vartan tells about what it's like to do crypto in a failed state and what keeps him going.

Spotlight

Who are you & where are you from?

My name is Vartan Kaloussian, I was born in Lebanon with Armenian roots, thus making me Lebanese Armenian. I'm currently 26 years old, but feel like my prime 20s are going to waste in a dysfunctional system.

In my young years, i was passionate about becoming a football player as I was great at it & a football fanatic. Hala Madrid! (FYI: I still got it haha) But unfortunately, that was not an option cause that would not make me a good living here  & lack of Lebanese government support.

I have always been organized, ambitious, hard working, and socially adapt able. I speak 4 languages fluently ( English, French, Armenian, Arabic).

What is the situation like in Lebanon at the moment?

Sadly to say, Lebanon that was once given the honor to be called " The Swiss of The East" no longer applies due to several factors.

To start with, Lebanon remains beautiful and rich in its environment & scenery, but has politically & financial failed as a country.

At the moment, I can say that Lebanon is in its darkest stage with small hope to recover in the future.  I honestly do not know where to start with since my parents and grand parents that went through both past wars in Lebanon, admit that those are the hardest times Lebanese citizens are going through economically, mentally, and physically.

Before all else, citizens that had bank accounts, their balances are kind of frozen and limited to a minimal withdrawal amount per week/month. An estimate of almost over 50% of all banking sector employees were fired in the time span of last 2 years. With the start of 2022, some banks announced bankruptcy and the funds of some citizens were lost in the process. In other words, citizens did not have access to it funds during the worst times of corona too!

When I was born, $1 was equal to 1,500 Lebanese Lira & minimum wage for a job was around $650/month. Now after the country's economic collapse, $1 is equal to 25,000 Lebanese Lira and the all time high was 35,000 LL. Taking into consideration that minimum wage is around $40/month now with basic needs (bread, canned food, electricity, fuel) which would barely keep any citizen alive with the current wages! If both of my parents did not work along me, we would not make it through the month like a respected citizen should do.

Furthermore, the corrupted political system that has been stealing from its citizens for the past 15-20 years has failed to ground Lebanon safe financially and physically. Not only do Lebanese citizens have around 10 hours of electricity a day for the past few years, but  they have also encountered one of the largest non-nuclear explosions on August 4, 2020.

Finally, I can say that, I currently see Lebanon is going through a silent war & a modern day of slavery where most of its citizen are on the verge of poverty or barely holding up. People work all month to break even at the end of it with the daily life costs or even being in debt!

How do you earn a living?

I graduated with honors (3.4/4) GPA with a BA in Banking & Finance from the American University of Science and Technology. I have pursued this major, because i was intrigued by the world of economics but at the same time, a banksman a few years back (5 years & before) had numerous benefits which made me pursue that domain as well. Along with the failed banking system that started falling hard in 2020, my dream of having a decent job for the degree I have faded away.

In addition to that, throughout the years, I have worked in Sales, Cashier, Super market stock keeper, & currently working in Library not too far from my house with a monthly income of 80$. I feel like my prime years where I should be saving up from work pay or being able to go out to have some fun are just not possible and not existent in Lebanon since its economical collapse.

How & why did you get into crypto?

I got into crypto late 2019- beginning of 2020 (not so early) and with only 800$. That is when I felt that Lebanon was entering a recession rather a hyperinflation cycle (as soon as 1 $ became 3,000 LL rather than 1,500 LL). I invested my spare 800$ that I had into Binance hoping and seeking financial freedom. Lucky me, it was a great step I took because i was not only able to book some profits (kept my money safe) , but also expanded my knowledge in my financial field.

I have always been the curious type of person, wanting to know/learn more. In addition to that, I can say that crypto has been an easy medium to store or transfer money since OMTs in Lebanon charges 2% of received money ( ex: for 1000$ received, 20$ is charged).

What does crypto adoption look like in your country?

Crypto adoption is on a rise currently in Lebanon (few stores accepting USDT or so) but if I would give a rough estimate it would be around 40% of the population. Mainly being the younger generation (from the age of 18 till 40).

So over all we can say that most of the young generation escaped part of the system by choosing crypto, thus I believe it will or should be adopted by country in the near future.

Are there any regulations regarding crypto in your country?

There is currently no regulations for crypto in Lebanon, and in fact this year it was prohibited to open a crypto account since the government realized that some people managed to get a good sum of money out of their bank accounts and straight into crypto (the trend kept growing but at a slow pace).

A few crypto store opened, but each have a different rate of withdrawals. By that, I mean, there are stores that charge an individual 2% of amount of USDT if they want to withdraw and some 1% and other 0.5%. It all depends on the connection the individual has.

What does crypto and NFTs mean to you?

For me, crypto is financial freedom and I have actually experienced how cruel banks were with their investors in Lebanon!

I believe NFTs are quiet similar to crypto in having a strong community and who knows you might become financially stable from a flip. I was introduced to NFTs through Hathor Network and the experience has been smooth and fee-less, hence growing into a community I can call home.

How does crypto help in a economically failed country like yours?

As I previously mentioned, Lebanese citizens, till this day can not access all their funds in the banks and are restrained to a certain amount. Moreover, crypto has helped me individually to book some profits from time to time which gave me a little bit of financial freedom, whereas hard working people not being able to access their money to survive is just insane!

Not only would it provide some sort of relief or safe haven to Lebanese citizens, but also it would boost the economic tourism & try to save this falling economy. Most importantly, it would reduce the strong reliance on the U.S. Dollars, thus reducing the costs of transfers & boosting domestic adoption.

Where do you see crypto going in your country in the coming years?

As discussed earlier, I believe Lebanon's only hope to recover from this failed economic system is to adopt Bitcoin as a legal tender as soon as possible since that would solve several on-going problems such as ease and safety storage of money, reduce transaction costs by not being affected of too much volatile price action of the Lebanese Lira vs U.S. Dollar, increase tourism & get back the revolutionary youth migrated brains to build a Modern innovative country, to be honored back with title of ' Swiss of the East', and most importantly to achieve financial freedom in this vicious country.

Where do you see yourself in 5 years?

I would like to see myself financially free in 5 years, who knows? You never know, but with those wages here in Lebanon, its just a dream. I believe modern day slavery can eliminated or reduced massively by adopting crypto. Most of my friends, at least the ones capable of leaving the country, already left.

We tried to make a revolution, but damn the country is too corrupt!

I would at least like to find myself and my family safe, healthy & retire my parents.