Central Bank of Lebanon Hints at State-Backed Cryptocurrency

H.E. Mr. Riad Salamé, the governor of Lebanon’s central bank, Banque Du Liban (BDL), told a gathering in Beirut the country’s government is examining a possible state-backed cryptocurrency. Mr. Salamé also commented about bitcoin and the future of digital currencies in Lebanon. 

Also read: Saudi Central Bank Says Cryptocurrency Industry is “Not Mature Enough” to Warrant Regulation

Lebanon Readies for an Electronic Currency Future

Thomson Reuters’ Zawya reprinted from The Daily Star, a Lebanese daily, quoting Banque Du Liban Governor, H.E. Mr. Riad Salamé, head of Lebanon’s central bank.

Mr. Salamé said he understands “that electronic currency will play a prominent role in the future.”

The governor was speaking at a Beirut Corporate Social Responsibility conference, sponsored in part by BDL.

“But BDL must first make the necessary arrangement before taking this step,” he continued, “and develop [a] protection system from cybercrime. Both the Special Investigation Commission and Banking Control Commission are cooperating to prevent such electronic crimes,” The Daily Star reports the governor as saying.

Mr. Salamé expanded on the idea of a future state-backed digital currency. The article paraphrases the central bank head’s proposal, “the new digital currency will fall under Lebanese law and be monitored by BDL. But the governor did not give any indication how the new currency would be introduced in Lebanon.” H.E. Mr. Riad Salamé

The BDL governor commented on the issue of the world’s most popular cryptocurrency, bitcoin, reiterating “his opposition to the use of bitcoin in Lebanon because it is not well regulated,” The Daily Star summarized. According to the article, the central bank head also  remarked “bitcoin and similar currencies are a big threat to the consumer and payment systems.”

“These [cryptocurrencies] are not currencies but rather a commodity whose prices rise and fall without any justification,” Mr. Salamé warned. “For this reason, BDL has banned the use of this currency in the Lebanese market.”

Returning to the issue of a state-backed cryptocurrency, he forecasts that a “digital currency will be issued by BDL and will be available in the next few years.”

The objective of the financial architecture of the Central Bank aims to secure the stability of the national currency and protect the Lebanese economy.

Though the BDL head clearly feels currencies such as bitcoin are a threat to users, he does not feel the same way with regard to such currencies challenging the nation’s fiat paper. Mr. Salamé is reported to believe “there is no threat against the Lebanese pound thanks to the $43.5 billion in foreign reserves held by BDL,” The Daily Star asserts.

“The objective of the financial architecture of the Central Bank aims to secure the stability of the national currency and protect the Lebanese economy,” he assured.

The only other statement made by a BDL official on the issue of bitcoin and cryptocurrencies was made in 2013. It contained all the usual warnings and prohibitions long familiar to bitcoiners around the world.

What are your thoughts on the Lebanese central bank issuing a state-backed cryptocurrency? Tell us in the comments below!

Images courtesy of: Pixabay, BDL Accelerate 2015, YouTube Executive Magazine. 

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