In a significant move to regain control over Libya’s fracturing monetary system, the Governor of the Central Bank of Libya (CBL), Naji Issa, has called for a nationwide crackdown on unlicensed foreign exchange (FX) bureaus and informal trade channels.
In a series of letters addressed to the Prime Minister and security agencies, Governor Issa urged executive authorities to take immediate legal action to close “grey market” exchange offices that operate without official permits.
The crackdown comes as Libya faces a perfect storm of economic challenges:
Falling Oil Prices: Brent Crude has dipped toward $55, squeezing the nation’s primary revenue source.
Unmet Promises: Governor Issa previously promised that the Dinar would strengthen and the liquidity crisis would end by October 2025 – goals that remain unfulfilled.
Inflation: High commodity prices continue to hurt the average citizen, driven by the disparity between official and black-market exchange rates.
Curbing the ‘Parallel’ Economy
The CBL’s directive is part of a broader strategy to stabilize the Libyan Dinar (LD), which has faced severe volatility. The Governor highlighted that the rise of unlicensed offices has led to a “remarkable development” in the circulation of foreign currency and local dinars outside of the formal banking framework.
According to the CBL, these unregulated entities contribute to:
Money Laundering & Terrorist Financing: Violating existing AML/CFT laws.
Currency Devaluation: Speculative activities that have seen the Dinar plunge as low as 8.40 per USD on the black market recently.
Illicit Financial Flows: Uncontrolled transfer of funds both inside and outside the country.
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Banking System vs. The Street
Beyond just closing physical bureaus, Governor Issa has pushed for a decree that would prohibit all imports and exports from occurring outside the formal banking system. By mandating that all trade be settled through bank-approved transactions, the CBL aims to:
Dry up the demand for U.S Dollars on the black market.
Increase the value of the Libyan Dinar.
Improve cash liquidity within the formal banking sector, which has been plagued by shortages.
Why This Matters for the Crypto & Fintech Space
While the directives focus on traditional FX offices, the move highlights the growing tension between formal central banking and the decentralized or “informal” methods citizens use to preserve value.
In many emerging markets, when formal banking systems fail to provide liquidity or stable exchange rates, users often turn to Peer-to-Peer (P2P) platforms and stablecoins (like USDT) to facilitate trade. By tightening the noose on unlicensed FX offices and informal import financing, the CBL is essentially attempting to force all economic activity back into a regulated – but currently struggling – banking infrastructure.
In 2023, Binance revealed that it had over 13,000 users in Libya, with many not having completed the required KYC making it possible to undertake unlicensed activities without identification.
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As the CBL moves to digitize and formalize the economy, the success of these measures will depend on whether the formal banking sector can actually meet the liquidity needs that the “black market” currently services.
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