Lebanon Central Bank Reveals Plan to Create State-Backed Cryptocurrency

Announcements, News, Regulation | October 31, 2017 By:

The Banque du Liban (BDL), the central bank of Lebanon, is planning to introduce its own cryptocurrency, according to the central bank governor.

Speaking at the Beirut Corporate Social Responsibility conference, Governor Riad Salameh said the BDL understand that electronic currency will play a prominent role in the future. But BDL must first make the necessary arrangement before taking this step and develop a protection system from cybercrime. He added that both the Special Investigation Commission and Banking Control Commission are cooperating to prevent such electronic crimes.

The central bank governor said the new digital currency will fall under Lebanese law and will be monitored by BDL. But the governor did not give any indication how the new currency would be introduced in the country.

Salameh also talked about why cryptocurrencies were ineffective in serving as national currencies. Salameh said that the central bank prohibited the use of the cryptocurrencies across Lebanon due to their nature resembling that of commodities.

“These [bitcoin] are not currencies but rather a commodity whose prices rise and fall without any justification, said Salameh. “For this reason, BDL has banned the use of this currency in the Lebanese market. We understand that electronic currency will play a prominent role in the future. But BDL must first make the necessary arrangements before taking this step and develop [a] protection system from cybercrime.”

In 2013, the central bank issued a warning against buying, holding, and using cryptocurrencies. The warning highlighted the risks relating to money laundering and terrorism financing.