Legal Crypto In Lebanon

Overview of Cryptocurrency Legality and Regulation in Lebanon

Legality of Cryptocurrency in Lebanon

Cryptocurrencies, like Bitcoin, are not considered as an official currency of the country in Lebanon. The Lebanese government and central bank (Banque du Liban) have warned against their risks, including their volatility and absence of regulation. However, there is no specific law that bans owning, trading, or using cryptocurrencies, so they exist in a sort of legal vacuum. The Central Bank prohibited the use of local payment cards to purchase cryptos in 2013, in a sign of caution. Lebanon’s dire economic situation, which has seen the Lebanese pound losing more than 95% of its value since 2019 and heavy capital controls in place, has led to the adoption of cryptocurrencies in a big way. Stablecoins serve as a way for citizens to store value and access global markets — they frequently organize cash-to-crypto transactions over community-driven Telegram groups to circumvent locked up bank accounts in an economy starved of cash.

Laws Regulating the Cryptocurrency Market

Cryptocurrency in Lebanon There is no law in Lebanon that provides for cryptocurrencies, and therefore there is no direct regulation of cryptocurrencies. The main restrictions on cryptocurrencies in Lebanon are summarised in the table below:

Regulation/Measure	Description	Impact	Year Enacted
Central Bank Circular (2013)	Prohibits financial institutions from engaging in cryptocurrency transactions or facilitating purchases with local payment cards.	Restricts access via traditional banking; encourages P2P and cash-based trading.	2013
No Legal Tender Status	Cryptocurrencies are not recognized as legal tender.	Businesses cannot legally accept cryptocurrencies as payment, limiting commercial use.	Ongoing
No Specific Tax Guidelines	General tax laws may apply to profits from trading or mining, but no clear crypto-specific guidelines exist.	Leads to inconsistent tax enforcement and uncertainty for users.	Ongoing
Absence of Exchange Oversight	Cryptocurrency exchanges operate without licensing or consumer protection requirements.	Increases risks of fraud and lack of legal recourse for users.	Ongoing

The absence of a comprehensive regulatory framework has prompted calls for balanced policies to protect consumers while leveraging cryptocurrencies to address Lebanon’s economic challenges.

Most Common Cryptocurrency Exchanges and Exchange Type

Lebanese nationals use cryptocurrencies in several formats despite regulations. The largest platform, Binance provided a peer-to-peer (P2P) trading to bypass banking restrictions and permits the trade with cash and even mobile payments. You can also trade Bitcoin face-to-face using cash, mobile payments, gift cards, and even with the help of Telegram groups via LocalBitcoins and Paxful. Physical exchange counters, operating off the books, offer cash-to-crypto transactions, with no oversight. Stablecoins, such as Tether (USDT) are very popular to protect against the depreciation of the Lebanese pound, transactions are conducted through P2P groups or direct brokers, proving the necessity of trusting solutions in Leanon’s highly suppressed financial climate.

DeFi Market in Lebanon

DeFi is starting to take off in Lebanon, but is still constrained by lack of knowledge, technical literacy and unreliable internet. The banking crisis, which has left millions shut out of their savings, has fueled interest in DeFi as a decentralized option. Tech enthusiasts are the only people using platforms and services like Uniswap (for trading tokens), Aave (for credit), Compound (for interest) and the various small and local yield farming pool (among local bitcoin-people, where I live). There are no defined rules for DeFi, meaning there is little recourse for users who’ve been scammed or lost their money.

NFT Market in Lebanon

The NFT trend is catching on in Lebanon with a growing number of local artists and creators turning to the digital assets to make money in the face of the country’s downward-spiralling economy. Platforms such as OpenSea, Rarible and Foundation are used to produce and trade NFTs, with some artists releasing collections showcasing Lebanon's cultural heritage and the recovery after the August 2020 Beirut port explosion to appeal to international buyers. There is no specific NFT regulation, but they may have to be classified or differentiated from financial tokens to sidestep overly restrictive regulations. High Ethereum gas fees and lack of international payment options prevent wider adoption.

Useful Information

• CoinMENA: A crypto exchange headquartered in Bahrain and in line with Sharia law, the exchange is available for Lebanese residents so they trade securely and with fiat on-ramps.
• BitOasis: Middle East-centric exchange offering Lebanese access to Bitcoin and Ethereum using bank transfers or cash deposits in surrounding countries.
• Beirut Cryptocurrency Communities: Joining local blockchain groups, like the Beirut Bitcoin Meetup, are a great way to meet and learn from people interested in safe cryptocurrency use.
• Lebanese Blockchain Association: Lobbying for crypto-friendly laws and resources for learning about DeFi and NFTs.
• Polygon for NFTs: Lebanese artists are using Polygon’s layer – 2 scaling solution for rolling out NFTs at lower transaction fees than allowed with Ethereum.
• Mobile Money Transfers: MTOs, like OMT and Whish Money offer cash-in/cash-out in P2P crypto trades, thus linking the gap between the two currencies.
• Crypto Remittance Services: Services such as BitPesa allow Lebanese expatriates to send crypto remittances, which can then be cashed out at home.

Conclusion

The cryptocurrency industry in Lebanon is running in a gray zone on the ground, according to the table of laws, as there is no outright ban on crypto activities, but the Central Bank’s 2013 circular has impeded bank integration. Trust in avenues such as Binance, LocalBitcoins and Paxful, amid an economic crisis, is building while Telegram groups are facilitating cash-based P2P trading. Stablecoins tackle devaluation, and markets of DeFi and NFTs are promising, artists achieve global reach by entering culturally important NFT projects. The following resources, such as local exchanges and crypto meetups, are supplementary tools to understand this space. With the backdrop of a Lebanese economy in turmoil, necessary regulation could legitimise cryptocurrency, unlocking innovation and managing risk for the cryptocurrency-dependent nation.