Lebanon
Retail_Trading_Status
- Analysis ID
- #709
- Version
- Latest
- Created
- 2025-12-12 04:43
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- 1323c867...
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Executive Summary
Cryptocurrency trading in Lebanon operates in a regulatory gray zone characterized by a strict banking ban but no explicit prohibition on individual possession or peer-to-peer trading. The Banque du Liban (BDL) and the Capital Markets Authority (CMA) have prohibited licensed financial institutions from dealing in cryptocurrencies to protect the fiat currency and banking sector. However, due to the severe economic crisis and devaluation of the Lebanese Lira, a robust informal market has emerged where citizens widely use stablecoins (USDT) for savings and payments, tolerated by authorities largely out of necessity.
Key Pillars
Banque du Liban (BDL) - Primary Central Bank
Capital Markets Authority (CMA) - Regulator for financial markets
Banking Ban - Prohibition on banks processing crypto transactions
Special Investigation Commission (SIC) - AML/CFT oversight
Landmark Laws
BDL Announcement on Virtual Currencies (Announcement No. 900) - Enacted: 2013-12-19
- Warned banks and financial institutions against purchasing, holding, or dealing in virtual currencies like Bitcoin due to risks of volatility and money laundering. Effectively cut off the banking sector from the crypto market.
- Source
CMA Announcement on Electronic Money and Cryptocurrencies (Announcement No. 30) - Enacted: 2018-02-12
- Explicitly prohibited all licensed financial institutions from issuing, marketing, or trading cryptocurrencies for their own account or on behalf of clients.
- Source
Electronic Transactions and Personal Data Law (Law No. 81) - Enacted: 2018-10-10
- Defined 'electronic money' broadly but left the specific regulation of digital currencies to the BDL. It did not criminalize the use of cryptocurrency by individuals.
- Source
Considerations
Banking Blockade: Local bank cards and transfers cannot be used to buy crypto directly; users rely on P2P and OTC cash desks.
Informal Economy: USDT is widely accepted as a de facto parallel currency due to hyperinflation.
Mining Crackdowns: Authorities occasionally raid mining operations, primarily due to illegal electricity usage rather than the act of mining itself.
No Consumer Protection: Users have no legal recourse for fraud or exchange collapses as the sector is unregulated.
AML Risks: The lack of formal regulation makes the sector vulnerable to money laundering, drawing scrutiny from international bodies.
Notes
The 'Gray-Zone' status here is unique because it is driven by state failure. The banking ban is strict, but the state lacks the capacity (and perhaps the will) to ban individual usage, which has become essential for economic survival.
Remaining Uncertainties
- Will the BDL issue a state-backed digital currency (CBDC) as hinted in previous years?
- Will new AML laws specifically target P2P crypto traders to satisfy FATF requirements?
- Exact legal status of 'mining' if done with private generators/solar power (currently conflated with electricity theft).
Detailed Explanation
Detailed Explanation
Lebanon's cryptocurrency regulatory environment is definitively classified as a 'Gray-Zone.' This status is characterized by a strict formal prohibition on licensed financial institutions dealing in digital assets, coupled with a lack of explicit regulation or prohibition for individual possession and peer-to-peer trading. This gray zone is uniquely shaped by the country's severe economic crisis, which has led to a robust informal market where cryptocurrencies, particularly stablecoins like USDT, are widely used for savings and payments as a de facto parallel currency, largely tolerated by authorities out of necessity. The regulatory framework is established through key announcements from the primary financial authorities. The Banque du Liban (BDL), the central bank, initiated the formal stance with its Announcement No. 900 on December 19, 2013, which warned banks and financial institutions against purchasing, holding, or dealing in virtual currencies like Bitcoin, citing risks of volatility and money laundering. This was later reinforced by the Capital Markets Authority (CMA) through its Announcement No. 30 on February 12, 2018, which explicitly prohibited all licensed financial institutions from issuing, marketing, or trading cryptocurrencies for their own account or on behalf of clients. These actions effectively created a banking blockade, cutting the formal financial sector off from the crypto market. The Electronic Transactions and Personal Data Law (Law No. 81) enacted on October 10, 2018, defined 'electronic money' broadly but left the specific regulation of digital currencies to the BDL and did not criminalize individual use. The primary regulatory bodies are the Banque du Liban (BDL) as the central bank, the Capital Markets Authority (CMA) as the regulator for financial markets, and the Special Investigation Commission (SIC) which oversees anti-money laundering and counter-terrorist financing (AML/CFT). The key requirement stemming from this framework is a strict prohibition on banks and licensed financial institutions from processing any cryptocurrency-related transactions. For individuals and the informal economy, there are no formal compliance requirements, registration procedures, or licensing regimes, placing all activity outside the regulated financial system. Major restrictions include the complete banking ban, which prevents the use of local bank cards or transfers for buying crypto, forcing reliance on peer-to-peer platforms and over-the-counter cash desks. There is no consumer protection, leaving users with no legal recourse for fraud or exchange collapses. Furthermore, while individual usage is not explicitly banned, authorities have conducted occasional crackdowns on mining operations, primarily targeting illegal electricity usage rather than the act of mining itself. The sector remains vulnerable to money laundering risks due to the lack of formal oversight, drawing scrutiny from international bodies. The current state is largely driven by the country's economic collapse, where the formal banking ban exists but the state lacks the capacity and will to enforce a ban on individual usage, which has become essential for economic survival.
Summary Points
I. Regulatory Status
* Lebanon's cryptocurrency regulatory status is a Gray-Zone.
* This status is characterized by a strict banking ban on licensed institutions but no explicit prohibition on individual possession or peer-to-peer (P2P) trading.
* The gray zone is uniquely driven by state failure and economic crisis, leading to a robust informal market where crypto use is tolerated out of necessity.
II. Key Regulatory Bodies
* Banque du Liban (BDL): The primary central bank, which issued the foundational warning against virtual currencies.
* Capital Markets Authority (CMA): The regulator for financial markets, which prohibited licensed institutions from crypto activities.
* Special Investigation Commission (SIC): The body responsible for AML/CFT oversight.
III. Important Legislation
* BDL Announcement on Virtual Currencies (Announcement No. 900) - Enacted: 2013-12-19
* Warned banks and financial institutions against purchasing, holding, or dealing in virtual currencies like Bitcoin due to risks of volatility and money laundering.
* Effectively cut off the banking sector from the crypto market.
* CMA Announcement on Electronic Money and Cryptocurrencies (Announcement No. 30) - Enacted: 2018-02-12
* Explicitly prohibited all licensed financial institutions from issuing, marketing, or trading cryptocurrencies for their own account or on behalf of clients.
* Electronic Transactions and Personal Data Law (Law No. 81) - Enacted: 2018-10-10
* Defined 'electronic money' broadly but left the specific regulation of digital currencies to the BDL.
* Did not criminalize the use of cryptocurrency by individuals.
IV. Compliance Requirements
* For licensed financial institutions (banks, etc.): Strict prohibition on dealing in cryptocurrencies as per BDL Announcement No. 900 and CMA Announcement No. 30.
* For individuals and informal market participants: No formal compliance requirements, licensing, or registration exist, as the sector is unregulated.
V. Notable Restrictions or Limitations
* Banking Blockade: Local bank cards and transfers cannot be used to buy crypto directly; users rely on P2P and OTC cash desks.
* No Consumer Protection: Users have no legal recourse for fraud or exchange collapses as the sector is unregulated.
* Mining Crackdowns: Authorities occasionally raid mining operations, primarily due to illegal electricity usage rather than the act of mining itself.
* AML Risks: The lack of formal regulation makes the sector vulnerable to money laundering, drawing scrutiny from international bodies.
VI. Recent Developments or Notes
* Due to hyperinflation and the devaluation of the Lebanese Lira, stablecoins (USDT) are widely used as a de facto parallel currency for savings and payments in the informal economy.
* The banking ban is strict, but the state lacks the capacity and will to ban individual usage, which has become essential for economic survival for many citizens.
* The informal market for crypto trading is robust and tolerated, operating entirely outside the formal banking system.
Full Analysis Report
Full Analysis Report
The regulatory status of cryptocurrency in Lebanon is best classified as a 'Gray-Zone'. While there is no law explicitly criminalizing the possession, trading, or mining of cryptocurrencies by individuals, the formal financial sector is completely barred from participating in the market. This creates a bifurcated system where the activity is technically legal for the public but operationally restricted from the traditional banking system. The Banque du Liban (BDL) initiated this stance with Announcement No. 900 in 2013, warning against the risks of Bitcoin and effectively prohibiting banks from facilitating crypto transactions. This was reinforced in 2018 by the Capital Markets Authority (CMA) via Announcement No. 30, which forbade licensed institutions from trading or marketing digital assets.
Despite these prohibitions, Lebanon has one of the highest rates of crypto adoption in the Middle East, driven by necessity rather than speculation. Following the financial collapse in 2019 and the subsequent devaluation of the Lebanese Lira, citizens turned to cryptocurrencies—specifically USDT (Tether)—as a lifeline to preserve wealth and conduct daily transactions. An informal network of Over-the-Counter (OTC) desks and peer-to-peer (P2P) traders has emerged to facilitate the exchange of physical cash for crypto, bypassing the paralyzed banking system entirely.
Enforcement is selective and primarily focused on the intersection of crypto with other illegal activities. For instance, security forces have raided crypto mining farms, but these actions are typically cited as crackdowns on the theft of state electricity or unauthorized use of the grid, rather than the act of mining itself. Similarly, arrests involving crypto often relate to online gambling or money laundering investigations rather than simple trading. The Electronic Transactions Law (Law No. 81 of 2018) introduced definitions for electronic money but stopped short of regulating or banning decentralized cryptocurrencies, leaving a legislative gap that the BDL has yet to fill with a comprehensive framework.
Currently, the government tolerates this informal economy because it provides a critical flow of remittances and liquidity that the formal banking sector cannot offer. However, the lack of regulation leaves users vulnerable to scams and theft without legal recourse. International pressure from the IMF and FATF regarding anti-money laundering (AML) controls remains a potential driver for future regulation, but for now, the status quo is a tolerated but formally isolated 'Gray-Zone'.
The regulatory status of cryptocurrency in Lebanon is best classified as a 'Gray-Zone'. While there is no law explicitly criminalizing the possession, trading, or mining of cryptocurrencies by individuals, the formal financial sector is completely barred from participating in the market. This creates a bifurcated system where the activity is technically legal for the public but operationally restricted from the traditional banking system. The Banque du Liban (BDL) initiated this stance with Announcement No. 900 in 2013, warning against the risks of Bitcoin and effectively prohibiting banks from facilitating crypto transactions. This was reinforced in 2018 by the Capital Markets Authority (CMA) via Announcement No. 30, which forbade licensed institutions from trading or marketing digital assets. Despite these prohibitions, Lebanon has one of the highest rates of crypto adoption in the Middle East, driven by necessity rather than speculation. Following the financial collapse in 2019 and the subsequent devaluation of the Lebanese Lira, citizens turned to cryptocurrencies—specifically USDT (Tether)—as a lifeline to preserve wealth and conduct daily transactions. An informal network of Over-the-Counter (OTC) desks and peer-to-peer (P2P) traders has emerged to facilitate the exchange of physical cash for crypto, bypassing the paralyzed banking system entirely. Enforcement is selective and primarily focused on the intersection of crypto with other illegal activities. For instance, security forces have raided crypto mining farms, but these actions are typically cited as crackdowns on the theft of state electricity or unauthorized use of the grid, rather than the act of mining itself. Similarly, arrests involving crypto often relate to online gambling or money laundering investigations rather than simple trading. The Electronic Transactions Law (Law No. 81 of 2018) introduced definitions for electronic money but stopped short of regulating or banning decentralized cryptocurrencies, leaving a legislative gap that the BDL has yet to fill with a comprehensive framework. Currently, the government tolerates this informal economy because it provides a critical flow of remittances and liquidity that the formal banking sector cannot offer. However, the lack of regulation leaves users vulnerable to scams and theft without legal recourse. International pressure from the IMF and FATF regarding anti-money laundering (AML) controls remains a potential driver for future regulation, but for now, the status quo is a tolerated but formally isolated 'Gray-Zone'.
Source Evidence
Primary and secondary sources cited in this analysis
"The BDL warns ... against the dangers of using 'virtual currencies' ... and prohibits banks and financial institutions from dealing with them."
"Prohibits licensed financial institutions from issuing, marketing, or trading cryptocurrencies."
"The concept of electronic money... does not include virtual currencies unless specified by BDL regulations."
"For now, the rule is clear - any crypto trading, formal or informal, is banned [for banks]. Yet privately, he admits the ban cannot last forever."
"The Banque du Liban (BDL) prohibits its banks from handling any transactions related to cryptocurrency; however, the ban is not enforced against peer-to-peer trading."
Web Sources (4)
Sources discovered via web search grounding
Search queries used (8)
- Lebanon crypto trading ban or legal
- Lebanon crypto adoption and regulation 2025
- legal status of cryptocurrency in Lebanon 2024
- Banque du Liban announcement 2013 bitcoin
- Banque du Liban cryptocurrency regulation circular 900
- CMA Lebanon cryptocurrency announcement 2018
- Banque du Liban circular number cryptocurrency 2013
- Lebanon Capital Markets Authority Announcement No. 900 cryptocurrency
https://coinshares.com/insights/the-node/por-trading-hope-how-crypto-became-lebanon-plan-b/
https://www.lebarmy.gov.lb/en/content/regulating-cryptocurrencies-dilemma-reaching-consensus
https://www.byblosbank.com/common/economic-research-new/lebanon-this-week/lebanon-this-week-528/cma-prohibits-usage-of-cryptocurrencies-by-financial-institutions
https://www.executive-magazine.com/cover-story/seeking-crypto-transparency