Stablecoin issuer / redeemer in Libya
Issues a fiat-pegged stablecoin to the public, operates redemption, and holds reserves backing the float.
Stablecoin issuer is not permitted in Libya.
Verdict Details
- Permitted
- no
- Local entity required
- No
- Licensing burden
- None
- Last updated
- 2026-07-13
AML Obligations
- No specific AML/CFT licensing or registration pathway exists for stablecoin issuers, as stablecoin issuance is not a recognized activity under Libyan law.
- If stablecoin activity were somehow conducted, general AML obligations under Law No. 1 of 2021 would apply: customer identification and verification (name, address, DOB, national ID/passport for individuals; legal form, proof of existence, senior management for entities).
- Beneficial ownership identification required for legal entity customers (25%+ ownership or control threshold).
- Ongoing monitoring and transaction scrutiny required on a risk-based basis.
- Enhanced Due Diligence (EDD) required for PEPs, high-risk jurisdictions, complex/unusually large transactions, and transactions involving new technologies favoring anonymity.
- Suspicious transaction reporting (STR) to the Libyan Financial Intelligence Unit (LFIU) required promptly for any suspicious activity; tipping-off prohibitions apply.
- Recordkeeping: CDD records, transaction records (including blockchain addresses), STRs, and account correspondence must be maintained.
Key Restrictions
- CBL Circular No. 2 of 2018 effectively bans all dealing in virtual currencies; commercial banks and financial institutions are prohibited from facilitating crypto transactions.
- No legal or regulatory framework exists for stablecoin issuance, redemption, or reserve custody.
- No mechanism exists to obtain a license, registration, or exemption for stablecoin issuance.
- Foreign-issued stablecoins cannot be lawfully used, distributed, or redeemed within Libya.
Key Risks
- Operating a stablecoin issuer targeting Libyan residents would be in direct violation of CBL guidance and would operate outside any legal framework.
- Any use of cryptocurrencies in illicit activities would trigger prosecution under Libya's AML/CFT laws (Law No. 1 of 2021).
- High enforcement risk: the CBL's prohibitions are the primary deterrent; financial institutions face sanctions for facilitation.
- Tax illegality risk: any income from crypto activity is derived from a banned activity, creating legal exposure beyond tax itself.
- Regulatory gray area: the CBL ban is not a statutory criminal prohibition, creating uncertainty about exact legal consequences.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Central Bank of Libya (CBL) Circular No. 2 of 2018:
General Prohibition: All virtual currencies are generally subject to the same prohibitory or highly restrictive guidance issued by the CBL. The CBL does not distinguish based on the underlying nature or rights conferred by the token; rather, it focuses on the medium of exchange itself being unregulated and risky.
CBL Warnings: The Central Bank of Libya has consistently issued strong warnings to financial institutions and the public against dealing with virtual currencies. These warnings constitute the primary enforcement mechanism, deterring widespread adoption and use.
All cryptocurrencies are treated with suspicion: Given the overarching restrictive stance, the concept of differentiating between utility tokens, security tokens, or other categories as distinct "securities" does not apply in Libya's current regulatory framework.
None Exist: There are no established registration or exemption requirements for token issuers in Libya. This is primarily because the issuance or facilitation of trading such tokens is not a recognized or permitted activity under current regulations. The CBL's guidance effectively makes it unfeasible or illegal for entities to operate in this space.
Lack of Legal Basis: Without a legal framework that recognizes and regulates crypto assets, there is no mechanism for issuers to seek registration or exemptions.
Law No. 1 of 2021 on Anti-Money Laundering and Combating the Financing of Terrorism (Amending and replacing earlier laws like Law No. 2 of 2005).
VASPs, if regulated, would be obliged to report any suspicious transactions to the Financial Intelligence Unit (FIU).
AML/CFT Prosecution: Any use of cryptocurrencies in illicit activities (e.g., money laundering, financing terrorism, fraud) would fall under Libya's existing Anti-Money Laundering and Combating the Financing of Terrorism laws. While these laws are not crypto-specific for securities classification, they provide a legal basis for prosecuting individuals involved in illicit financial activities, regardless of the asset used.
The fundamental principle is that cryptocurrency is banned in Libya. This overrides any discussion of specific tax treatments.
Any engagement with virtual assets carries significant legal and financial risks within Libya.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- high
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
No — stablecoin issuance, redemption, and reserve custody are not permitted in Libya; the Central Bank of Libya has banned all virtual currency dealings (CBL Circular No. 2 of 2018), no licensing framework exists, and any such activity carries significant legal and enforcement risk.
Questions this verdict aims to answer
- What e-money or banking license is required to issue?
- What reserve composition, segregation, and audit rules apply?
- What redemption rights must be granted to holders?
- Are foreign-issued stablecoins permitted for use locally?