Lebanon CBDC Tracker

Lebanon is in the research phase. Banque du Liban governor Riad Salameh said that the central bank would issue a CBDC (referred to as a digital Lebanese currency) in 2021. However, Lebanon remains categorized as being in the research phase because it is unclear at this time if there have been any developments since Salameh’s announcement. In fact, it’s likely the CBDC development has been paused considering governor Salameh has since been sanctioned for running an international corruption scheme.

CBDC History and Development

In 2017, Banque du Liban governor Riad Salameh said the central bank was looking into a digital currency as a means to establish protective measures against cybercrime and establish a new means of payment for Lebanese citizens in addition to what is already offered. Governor Salameh noted Bitcoin and other cryptocurrencies were prohibited saying, “What matters to us in order to maintain confidence is that the digital currency be issued by the central bank, and we will achieve that gradually.”

In 2020, Banque du Liban governor Riad Salameh said that the central bank would issue a CBDC (referred to as a digital Lebanese currency) in 2021. Governor Salameh noted that one goal of the CBDC is to move towards a cashless economy.

Human Rights and Civil Liberties Concerns

Lebanon earned a 43 out of 100 in Freedom House’s 2023 Freedom in the World report. Actions to restrict currency choice, target opposing voices, surveillance, and corruption are major issues in Lebanon. The issuance or adoption of a CBDC in Lebanon could worsen these issues.

The Lebanese government has maintained a hostile position on currency choice by increasingly restricting the use of bitcoin and cryptocurrency. The Banque du Liban issued a warning about cryptocurrency use in 2013. Then in 2018, the Lebanese government prohibited banks and other financial institutions from using cryptocurrency. Many governments have followed this path. They see the use of foreign currency and cryptocurrency as a threat and thus try to restrict the choices of citizens and corner them into using the CBDC.

According to Freedom House, “It is a criminal offense to criticize or defame the president or security services. Authorities sometimes use such laws to harass and detain journalists, and those detained are often forced to sign pledges to refrain from writing content viewed as defamatory by the government.” Unfortunately, a CBDC could be used as another tool in this effort. Across the world, governments have often turned to freezing and seizing the money of activists, political rivals, and protestors to undermine the opposition. A CBDC would make such initiatives easier by allowing governments to take direct control of each citizen’s finances.

The U.S. State Department reported that although the law prohibits arbitrary surveillance, “security services nonetheless monitored private email and other digital correspondence.” Unfortunately, a CBDC could be used to greatly expand surveillance by putting financial records on government databases by default.

“Political and bureaucratic corruption is widespread, and patronage networks generally operate unchecked,” according to Freedom House. The U.S. State Department added that “The most common types of corruption generally included political patronage; judicial failures, especially in investigations of official wrongdoing; and bribery at multiple levels within the national and municipal governments.” In fact, Banque du Liban governor Riad Salameh was sanctioned for running an international corruption scheme. The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.