Lebanon’s Collapse: A Personal Account of Hyperinflation and the Potential of Bitcoin
Lebanon, once lauded as the "Paris of the Middle East," has become a chilling case study in the rapid descent of a seemingly stable economy into chaos. Its recent history serves as a stark reminder of the devastating consequences of hyperinflation and the fragility of traditional financial systems. While academic texts detail the economic mechanics of such collapses, the human cost—the lived experience of ordinary citizens—often remains obscured. This article delves into the personal narrative of Tony Yazbeck, co-founder of The Bitcoin Way, who witnessed firsthand the catastrophic unraveling of Lebanon’s economy and explores how bitcoin could have served as a lifeline during this crisis.
Tony’s pre-collapse life was one of considerable success. He recalls, "My life in Lebanon was extraordinary. 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." This prosperity, however, masked a deeply flawed system. Lebanon’s banking sector, built on unsustainable practices and fueled by years of accumulating debt, ultimately proved to be a house of cards. The central bank’s artificial pegging of the Lebanese pound (LBP) to the U.S. dollar at an unrealistic exchange rate created a façade of stability that masked the underlying economic fragility. This peg required a constant influx of dollars to maintain. When these inflows dwindled, the inevitable collapse followed.
The turning point arrived in 2019. Lebanon’s banks began imposing restrictive capital controls, limiting access to savings without any legal framework. "Overnight, people lost access to their funds," Tony recounts. "You couldn’t withdraw your own money, and even if you could, it was in Lebanese pounds that were rapidly losing value." This restriction of withdrawals signaled a critical stage in the crisis, a desperate attempt by the government and banks to delay the inevitable unraveling of the monetary system. The damage, however, was already done.
By early 2020, Lebanon defaulted on its foreign debt, triggering a catastrophic plunge in the value of the LBP. Hyperinflation took hold with shocking speed, eroding the purchasing power of the Lebanese population. Tony’s previously successful businesses crumbled, and his savings evaporated. "I went from being a successful entrepreneur to having just $70 to my name in what felt like the blink of an eye," he recalls. "I couldn’t pay rent, school fees, or even afford basic groceries."
The impact of hyperinflation was immediate and devastating. Tony describes the price increases as astronomical: "A loaf of bread that once cost 1,500 LBP shot up to over 30,000 LBP within months." Fuel prices soared even higher. "In early 2023, a gallon of gas went from 25,000 LBP to over 500,000 LBP in just a few weeks. It was impossible to keep up with the prices." These price increases weren’t simply economic data points; they represented the erosion of livelihoods and the struggle for basic survival.
The economic crisis didn’t exist in a vacuum; it ripped apart the social fabric of Lebanon. Comfortable middle-class families found themselves struggling for survival, with basic necessities becoming scarce and excessively expensive. Power dynamics shifted, with those controlling access to essential goods gaining undue influence. "There were reports of gangs taking over neighborhoods, controlling access to goods and demanding protection fees," Tony notes, highlighting the breakdown of law and order and the rise of informal power structures. Even access to electricity became a luxury, with soaring generator fees adding another layer of hardship to an already desperate situation. As traditional monetary systems failed, people resorted to bartering, directly exchanging goods and services to meet their needs. The U.S. dollar, already popular, became the preferred currency for many transactions, alongside a surge in the use of stablecoins like Tether (USDT).
This experience raises a crucial question: Could bitcoin have provided a lifeline during this crisis? Tony’s answer is a resounding yes. "If I had known about bitcoin before the crisis, it could have saved me," he asserts. "Bitcoin would have given me a way to store value outside the banking system, which completely failed. I wouldn’t have been locked out of my own savings, and I could have preserved my wealth as the Lebanese pound collapsed."
Bitcoin’s key advantage in such situations is its inherent resistance to capital controls. No government or bank can freeze or restrict access to bitcoin. Furthermore, while the Lebanese pound lost over 90% of its value, bitcoin maintained its global purchasing power. "Bitcoin isn’t tied to any government or central bank, so it can’t be manipulated the way the Lebanese pound was," Tony explains. "It’s a hedge against hyperinflation, which would have been critical when prices were doubling and tripling every few months." Its status as a decentralized, digital bearer asset would also have been crucial in a situation where traditional banking systems had collapsed and bartering was prevalent.
Lebanon’s crisis holds profound lessons for the global economy. Tony warns, "What happened to me could happen anywhere. 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." He highlights the parallels between Lebanon’s pre-crisis situation and the current state of many developed economies, particularly the U.S., citing its growing national debt and unsustainable monetary policies. "The U.S. national debt now exceeds $35 trillion. Since 1971, when the dollar was taken off the gold standard, the money supply has increased by over 8,000%. That kind of money printing can’t go on forever," he points out. While the U.S. dollar currently enjoys reserve currency status, Tony cautions that this is not a guarantee against future collapse. "All fiat currencies are headed to zero eventually," he states.
Tony’s experience has led him to dedicate himself to educating others about the potential of bitcoin as a hedge against economic instability. Through The Bitcoin Way, he aims to empower individuals to protect themselves from the vulnerabilities of traditional financial systems. His message is clear: "Start educating yourself about bitcoin now, before it’s too late. Diversify your assets and don’t rely on fiat currency to preserve your wealth. The mechanics of hyperinflation don’t change just because you live in a wealthy country."
Lebanon’s collapse isn’t merely a cautionary tale; it’s a stark warning. The rapid escalation of hyperinflation, the collapse of the banking system, and the resulting social unrest serve as a potent reminder of the fragility of fiat currencies and the importance of financial sovereignty. By embracing bitcoin, individuals can take control of their financial futures, shielding themselves from the destructive forces of inflation and economic instability. Tony’s story underscores the power of personal responsibility and the transformative potential of decentralized digital assets in a world increasingly vulnerable to the unpredictable nature of traditional financial systems.
