🏦 Lebanon — When Your Own Central Bank Runs a Ponzi Scheme

For over two decades, Lebanon's banking system paid depositors interest as high as 20% by recycling their dollars into state financing. The World Bank has a specific word for that structure. Here's what happened when the dollars ran out.

🔬 AMS Core Frame

The currency-peg mechanics and banking-sector collapse below are documented and undisputed. Where responsibility for the 2020 Beirut port explosion specifically falls is a separate, still-unresolved legal question in Lebanese courts — this page keeps that part clearly labeled as inference, not settled fact.

How the peg worked, until it didn't

1,507.5

Lebanese lira per US dollar — the fixed peg maintained from 1997 to October 2019

Up to 20%

Interest rates the central bank (Banque du Liban) offered depositors

98%

How much the lira lost against the dollar, 2019 to March 2023

$400

Monthly dollar withdrawal limit imposed on depositors since 2019 — still in place

FACT

From 1997 to October 2019, the Lebanese lira was pegged to the US dollar at 1,507.5. The peg was the cornerstone of Lebanese central bank policy for over two decades, but the deficits required to sustain it became unsustainable from around 2016 onward.

FACT

Banque du Liban, Lebanon's central bank, offered depositors interest rates as high as 20% by recycling incoming deposit dollars into state financing rather than holding them as genuine reserves — a structure the World Bank has explicitly described as a Ponzi scheme.

🔬 Want the mechanics behind how banks create and move money in the first place?

The Ponzi-style dynamic here starts with understanding how money and credit actually get created in a banking system.

The Truth About Credit Creation →

📮 Lived through a currency or banking collapse?

If you have firsthand experience with a currency peg break, capital controls, or a bank run, you can submit a tip anonymously.

Submit a tip →