Lebanese central bank issues Middle East’s first Bitcoin warning

A warning from the Bank of Lebanon, issued in mid-December, ran through a list of risks related to Bitcoin and cryptocurrencies in general.

You probably have an idea already of what was said:

• Transactions are unregulated, and thus no one can account for or recover losses.
• Speculation has lead to price volatility.
• Criminals can commit crimes with such money.
• Terrorists can commit acts of terror with such money.
• Money launderers can launder money with … well, you know.

While not outright banning Bitcoin’s use, “the central bank of Lebanon warns against purchasing, keeping or using e-money,” the warning reads.

Lebanon has a particular incentive to regulate money transfers.

As a country with a tumultuous past few decades, Lebanon’s citizens have been moving away for generations now, resulting in a wide-flung diaspora. And many of those emigrants send money back home.

In fact, those remittances count for about 20% of the country’s GDP. The country’s healthy banking sector simply would not want to lose out on processing those transactions.

Also of note is the fact that issuing “e-money” has been prohibited since 2000, though it’s not clear what the legal status is for individuals who purchase Bitcoins through an exchange set up elsewhere.