Legal Crypto In Liberia

Liberia: Cryptocurrency and Its Place in Rigged Economy & Wealth Redistribution

Running a Ponzi Scheme of the Modern Epoch: How Cryptocurrency has Revolutionized Financial Systems across the Globe While Lagging in the Realization and Governance on the Part of the State. In Liberia, a West African country with a struggling economy that is currently experiencing a rebound, the use of cryptocurrency including Bitcoin and Ethereum by the tech elites is also making headlines locally. This article examines whether cryptocurrencies are legal in Liberia, the country’s relevant cryptocurrency laws, popular exchanges, how to buy cryptocurrencies in Liberia, as well as its DeFi and NFT markets.

Is Crypto Legal in Liberia?

Liberia has yet to adopt laws or regulations covering cryptocurrencies, thus they are not specifically regulated. Cryptocurrencies do not have legal tender status in the eyes of the Central Bank of Liberia (CBL), which regards the Liberian dollar and US dollar as the two official legal tenders in its dual-currency environment. Unlike places such as Algeria – where cryptocurrencies are openly banned – the Liberian state has not explicitly prohibited them, meaning limited use is occurring despite a lack of formal adoption.

The CBL has issued advisories warning against the risks of cryptocurrencies, including volatility, fraud, and possible use in illegal activities, but has not banned their use. This cautious approach represents a wider problem for countries like Liberia, which lacks the technical expertise to control new technologies. With no legal framework in place, cryptocurrency transactions exist without regulation, creating potential exposure for users but also opportunities for early adopters.

Legislation and Regulation in the Market

Financial regulations in Liberia are designed for traditional banking and anti-money laundering (AML), and there are no crypto-specific rules. Key legislation includes:

• Financial Institutions Act (1999): Governs banks and financial institutions and is silent on virtual currency.
• Anti-Money Laundering and Terrorist Financing Act (2012): Implements AML and counter-terrorist financing (CFT) regulations that could apply to suspicious transactions involving crypto.
• FX Law: Regulates currency transactions but does not include crypto.

The CBL is responsible for monetary policy and financial stability but has yet to create a framework for digital assets. Earnings from crypto activities (like trading or mining) are subject to general income tax laws in most countries in the region, but enforcement is weak due to the lack of tax infrastructure. This lack of regulatory clarity aligns with patterns seen in many African nations, where only 52.1% of countries with a legal crypto market have established comprehensive regulatory frameworks. As a member of ECOWAS, Liberia could be influenced by future regional crypto regulations, though none exist currently.

Exchanges and Means of Exchanging

People in Liberia are increasing their use of cryptocurrencies, with peer-to-peer (P2P) platforms and global exchanges becoming significant. Popular exchanges accessible to Liberians include Binance, Paxful, and Luno, known for low fees and ease of use. Paxful offers a P2P platform allowing users to trade digital coins using mobile money services like MTN Mobile Money, a popular payment method in Liberia.

P2P trading is popular due to Liberia’s cash-based economy and low banking penetration; only around 30% of adults have bank accounts. Decentralized exchanges like Uniswap are rarely used due to their complexity and accessibility challenges. The absence of regulation means users must exercise caution, as they risk scams or disputes on unregulated platforms.

DeFi and NFT Opportunities in Liberia

Liberia’s DeFi market is underdeveloped due to technological and financial barriers. DeFi platforms like Aave or Compound, which offer decentralized lending and trading, require stable internet and technical knowledge, both scarce in Liberia, where internet penetration is around 15%. Most crypto activity focuses on basic trading, with little involvement in DeFi protocols. The lack of regulatory clarity further inhibits adoption, as policymakers have yet to address technology governance, leaving users without legal protections.

The NFT market is also nascent. Global platforms like OpenSea are accessible, but high transaction costs, such as Ethereum gas fees, and low digital literacy limit participation. Few local creators and collectors exist, and the concept of digital ownership has yet to gain cultural traction in a nation prioritizing economic stability.

Useful Information

• Microfinance Integration: Some microfinance groups in Liberia are exploring crypto for small loans, bypassing traditional banks.
• Blockchain for Governance: Experiments use blockchain for auditable voter registration in local elections.
• Crypto Trading Community: Telegram groups in Monrovia help traders stay informed about markets.
• Wallet Security: Local tech enthusiasts advocate for hardware wallets to secure cryptocurrencies.

Key Data

Subtopic	Details
Financial Access	Crypto could reach 15% of unbanked Liberians by 2030 with better access.
Supply Chain Applications	Blockchain pilots track coffee exports for fair trade certification.
Mobile App Adoption	20% of urban crypto users rely on mobile apps for trading.
Connectivity Challenges	Only 25% of urban areas have stable 3G access, limiting online trading.

Conclusion

Cryptocurrency in Liberia operates in a legal gray area, neither explicitly allowed nor prohibited. The Central Bank of Liberia’s cautious approach enables limited adoption but leaves users vulnerable due to the lack of regulatory oversight. P2P platforms and exchanges like Binance provide access, but DeFi and NFT markets remain underdeveloped due to technological and economic obstacles. As global and regional crypto adoption grows, Liberia may face pressure to develop its regulatory stance, potentially aligning with ECOWAS frameworks. Until then, users must navigate this unregulated landscape with vigilance.