Living Outside the System: Bitcoin, Lebanon’s Banking Collapse, and Personal Sovereignty

Summary

The December 08, 2025 episode of The Bitcoin Edge with Paula features Michel Jabbour explaining how Lebanon’s banking collapse and capital controls erased savings and pushed citizens toward cash, dollarization, and alternative monetary rails. Jabbour describes living without a local bank account, being paid fully in Bitcoin, and using exchanges, USDT, and physical dollars to navigate a heavily cash-based economy. The episode links broken monetary and banking systems to wider questions of trust, governance, and personal sovereignty, positioning Bitcoin as both a practical tool and a framework for long-term decision-making.

Take-Home Messages

1. Banking System Fragility: Lebanon’s banking collapse and capital controls turned deposits into trapped claims, forcing households into dollar cash, informal markets, and alternative stores of value.
2. Operating Without Banks: Jabbour’s experience of earning a salary in Bitcoin and living without a local bank account illustrates a concrete survival strategy when formal financial infrastructure fails.
3. New Centralized Rails: Mobile money platforms such as Wish Money and Bob Finance substitute for banks but recreate familiar risks of opacity, political capture, and data surveillance.
4. Adoption Barriers Under Stress: Even under extreme currency debasement, Bitcoin adoption is constrained by unit bias, economic trauma, time poverty, and the pull of familiar assets like land and gold.
5. Sovereignty Beyond Money: The episode frames Bitcoin as part of a broader sovereignty strategy—spanning money, health choices, and multi-jurisdictional living—that becomes more attractive as institutions lose trust.

Overview

The episode follows Michel Jabbour’s journey from civil engineer and banker to someone who now lives largely outside formal banking systems. He recounts how Lebanon’s long-standing currency peg and banking sector imploded, with capital controls freezing deposits and wiping out years of accumulated savings. This systemic shock pushed him to treat Bitcoin not just as an investment idea but as a practical tool for earning, saving, and moving value across borders.

Jabbour explains how he now lives in Lebanon without a local bank account, relying instead on a salary paid in Bitcoin from a Bitcoin-focused company. He converts portions of that income into USDT and then into physical dollars through a network of local exchanges and trusted intermediaries. In practice, his daily life revolves around dollar cash, informal currency shops, and peer-to-peer arrangements that have replaced the role once played by commercial banks.

The discussion explores why Bitcoin remains a minority choice in Lebanon despite extreme monetary breakdown. Jabbour notes that only a small set of merchants, including a pharmacy, a grocery store, and a café, accept Bitcoin directly, while most transactions still occur in dollar cash. He attributes this to lingering trauma, unit bias favoring very cheap altcoins, and pervasive time poverty that leaves people unwilling or unable to study Bitcoin’s properties.

Beyond the mechanics of payments, Jabbour reflects on how these experiences reshaped his views on governance, community, and autonomy. He contrasts Lebanon’s dense social networks and mutual support with Canada’s higher average incomes but greater loneliness, visible inequality, and strict COVID-era controls over movement and association. In his account, post-1971 fiat money and open-ended money printing underpin war financing, declining product quality, and social strain, while self-custody of Bitcoin anchors a wider conception of sovereignty over money, health, and multi-jurisdictional life planning.

Stakeholder Perspectives

1. Lebanese Households: Seeking ways to preserve purchasing power, secure access to cash for daily needs, and reduce exposure to bank failures and sudden capital controls.
2. Local Merchants and Small Businesses: Balancing the operational burden of accepting Bitcoin or mobile money against perceived benefits in sales, fees, and resilience to local currency shocks.
3. Diaspora Families and Remittance Senders: Weighing the cost, reliability, and risks of Western Union-style services, centralized mobile rails, and Bitcoin-based transfers when supporting relatives.
4. Regulators and Central Banks: Concerned about losing monetary control as dollarization, informal markets, and open monetary networks weaken the effectiveness of traditional policy tools.
5. Bitcoin Service Providers and Educators: Interested in designing products, custody solutions, and educational efforts that fit cash-based, high-friction environments without exposing users to excessive risk.

Implications and Future Outlook

Lebanon’s experience illustrates how quickly confidence in bank deposits and local currency can collapse once capital controls and devaluation take hold. In such environments, households do not move directly to open networks but first gravitate toward familiar instruments like dollar cash and convenient centralized apps. Over time, whether Bitcoin becomes a meaningful safety valve will depend on practical rails, user education, and the perceived reliability of self-custody under stress.

The rise of mobile money intermediaries shows that technological fixes alone do not guarantee greater autonomy. New platforms can entrench fresh chokepoints, concentrating transactional data and compliance leverage in a small number of firms that effectively become shadow banks. Policymakers and users will need to assess whether these rails serve as transitional infrastructure toward more open systems or simply repackage legacy risks with digital interfaces.

For jurisdictions beyond Lebanon, the episode functions as an early warning about how populations adapt when fiat systems lose credibility at both the banking and currency levels. Decisions around capital controls, emergency support, and digital payment regulation will influence whether future crises drive users toward opaque intermediaries or toward open, verifiable monetary infrastructure. The next several years will test whether Bitcoin can move from being a defensive savings vehicle for a small minority to a widely accessible tool for financial resilience in fragile and increasingly intrusive states.

Some Key Information Gaps

1. How do bank collapses and capital controls reshape household saving behavior and trust in financial institutions in countries like Lebanon? Understanding these behavioral shifts is essential for assessing when populations abandon formal banking and begin experimenting with parallel monetary systems such as Bitcoin and dollar cash.
2. How does extreme currency debasement and repeated peg breaks alter long-term inflation expectations, wage bargaining, and pricing behavior? Clear evidence on these dynamics would help policymakers and researchers anticipate when devaluation tips from tolerable adjustment into persistent social and political instability.
3. Which educational narratives and tools most effectively build Bitcoin conviction among people who already favor hard assets like real estate, gold, and land? Insights here would support the design of outreach strategies tailored to culturally familiar hard-money preferences rather than generic technology messaging.
4. How do diaspora households currently choose among Western Union-style services, centralized mobile wallets, and Bitcoin rails for remittances into Lebanon? Identifying the trade-offs that matter most—fees, speed, usability, and perceived risk—can guide the development of Bitcoin-based remittance options that are both competitive and safe.
5. How would a gradual shift from fiat funding to harder monetary constraints affect the frequency, duration, and scale of wars in regions like the Middle East? Examining these links could clarify whether broader Bitcoin adoption might dampen incentives for prolonged conflict or simply redirect existing geopolitical strategies through new channels.

Broader Implications for Bitcoin

Monetary Stress Testing and Parallel Systems

Lebanon’s experience highlights how, when formal banks and local currency fail simultaneously, citizens rapidly construct parallel systems that blend hard currency, informal exchange, and digital tools. Similar patterns are likely to emerge in other jurisdictions facing prolonged fiscal mismanagement, making Bitcoin one of several competing rails rather than an automatic default. Over the next 3–5 years, researchers and policymakers will need to treat these hybrid ecosystems as de facto stress tests of how Bitcoin and fiat infrastructures interact under real-world crisis conditions.

Centralization Risks in Digital Payment Infrastructures

The growth of mobile money platforms that replace crippled banks underscores a broader risk: digital payment innovation can deepen centralization rather than disperse power. As governments lean on private intermediaries for surveillance, tax collection, and sanctions, these rails may become critical chokepoints even in countries without overt crisis. For Bitcoin, this raises strategic questions about how wallets, exchanges, and Layer 2 services are governed, and whether future regulation channels users toward custodial products that dilute the technology’s decentralizing potential.

Sovereignty-Centric Lifestyles and Multi-Jurisdictional Planning

Jabbour’s emphasis on aligning money, health choices, and residency decisions foreshadows a wider trend toward sovereignty-centric lifestyles. As more individuals hold portable digital wealth, relocate across borders, and diversify legal domiciles, Bitcoin becomes embedded in a broader toolkit for negotiating with states rather than simply exiting them. Over the medium term, this may shift bargaining power between high-tax, high-surveillance jurisdictions and more competitive, Bitcoin-friendly states competing for mobile citizens and their capital.

Remittances, Sanctions, and Regulatory Competition

The dependence of crisis economies on remittances suggests that cross-border flows will be a major arena where Bitcoin’s properties collide with sanctions policy and compliance regimes. States that aggressively police fiat rails may inadvertently increase the relative attractiveness of open networks for both legitimate users and illicit actors. Over the coming years, regulatory competition around remittances and capital controls is likely to shape where Bitcoin liquidity concentrates, which corridors gain prominence, and how seriously governments treat the technology as a parallel financial architecture.

Redefining Social Safety Nets in Monetary Crises

When savings are trapped in failed banks and local currency collapses, traditional social safety nets tied to domestic fiscal capacity can erode rapidly. Bitcoin offers only a partial substitute, but it enables individuals and communities to build bottom-up buffers that are harder to confiscate or debase. As similar crises unfold elsewhere, we may see experiments in community-level Bitcoin treasuries, mutual-aid structures, and NGO-led distribution models that complement or, in some cases, bypass failing state systems.