Economic and Technical Modeling of the Lebanese Crypto Currency: Implication for a Digital-Lira (DL)

Since 1997, the Lebanese pound has been pegged to the U.S dollar at a fixed rate, and at every crisis, people rush to banks to convert their LBP accounts into U.S.D causing a high demand for foreign currencies. Fear and uncertainty finds its way to the market, and the general sentiment often causes various sectors of the economy to be negatively affected. Lebanon is highly dependent on the U.S.D and the LBP had slowly become nothing but a symbol of independence and a heritage that tells the story of “Lebanon”. This paper will examine the century’s most aspiring technology to see how it can be implemented to create a new form of national currencies, and how such a technology can incorporate basic to complex monetary policies in an automated manner to gain value, and have a controlled inflation through a pre-programmed system. This paper will also break down the “Bitcoin” conditions and show how it can be modified to fit a locally produced national crypto-currency for Lebanon that will be referred to as “Digi-Lira”. Finally, this paper will highlight the economic impact of the Digi-Lira on demand, investment, international trade, remittances, the unbanked population, and the banking sector.