In brief Increasingly, in Lebanon, Egypt, and Poland, banks are limiting access to foreign currency.

The measures are in response to the coronavirus crisis, which Nassim Nicholas Taleb does not consider to be a Black Swan event.

Taleb has advised people to turn to cryptocurrencies.

Nassim Nicholas Taleb, celebrated author of "The Black Swan” and “Fooled By Randomness,” has urged Lebanese citizens to turn to cryptocurrencies, as banks increasingly impose tighter controls amid a deepening financial crisis.

The Lebanese-American author and former options trader spoke out on Twitter on Thursday, tweeting “Use Cryptocurrencies!” His entreaty was in response to a post about the Bank of Lebanon ordering foreign currency remittances to be paid out in the local currency.

Lebanon’s financial crisis predates the more recent economic fallout from the coronavirus pandemic. The Lebanese pound has lost half of its value since October after capital inflows dried up and protests erupted.

By some estimates, the number of Lebanese living overseas is three times the resident population in the country. So many Lebanese rely on money transfer services from abroad. But on Thursday, the Lebanese central bank ordered foreign remittances to be paid out in local currency at a "market rate”—the measures were taken to avoid a bank run.

Protestors in Lebanon complain that banking policies are inefficient and corrupt. (Image: Wikipedia)

Taleb has voiced his approval of Bitcoin and cryptocurrencies before.

“I am very glad that we have cryptocurrencies,” he said at a conference in India last December. “Of course, you are going to have frauds and Ponzi schemes and all that with Bitcoin and cryptos. But when you see governments—like in Lebanon—doing the Ponzis you tell yourself what is better,” he said.

Lebanon is not the only country limiting withdrawals and transfers of foreign currency. Banks in Egypt, Poland, and even the US have imposed new restrictions in the past weeks, due to the economic crisis unleashed by covid-19.

The coronavirus crisis is not a Black Swan

The unprecedented crisis has often been referred to as a Black Swan event. Rarity, extreme impact, and retrospective (though not prospective) predictability are the characteristics of such an event, according to Taleb, who coined the term.

In his book “The Black Swan,” published in 2007, he predicted “a very strange virus spreading all over the planet,” the active progress of which was associated with the number of people travelling. The outdated design of the aircraft, which allows the spread of infections in the cabin, combined with airport infrastructure unprepared for the epidemic, allowed travel to accelerate the spread of the dangerous virus, he wrote.

But he doesn’t believe the crisis precipitated by the coronavirus pandemic fits the Black Swan criteria.

“It’s not a Black Swan. It is a White Swan,” he insisted last month, in an interview with Bloomberg.

“I’m so irritated at people who say that it’s a Black Swan. We have had Black Swans—September 11th [2001] is an example. This was not that. And there’s no excuse for companies and corporations not to be prepared,” he said.

Taleb’s most recent mission is to instruct them how to do just that.