The BDL warned of the use of ‘Bitcoins’
Measures to protect purchasers
and fight money laundering
The Central Bank (BDL) issued a new announcement that forbids banks, financial institutions, currency exchange companies, brokerage firms, and the public from purchasing, holding, and dealing with electronic money, especially the ‘Bitcoin’. This digital currency can be used for Internet transactions quickly and at low cost. It is designed for global e-commerce with the ease of a credit card but without its high fees.
“The BDL step may be considered as a protective measure of the financial sector, especially that nowadays purchase transactions are more and more done online with the widespread of digital tools,” said Rayyan Zeheim, Chief Dealer at Lebanese Dealers Corporation brokerage company.
Many risks can emerge from dealing with the ‘Bitcoin’, according to the BDL. The platforms used to issue and deal with this currency are not subject to any regulation. In case of losses, there is no legal claim for refunds.
The ‘Bitcoins’ are not issued or guaranteed by the Central Bank. Therefore, they are highly and quickly volatile in terms of their price, and they may go down to zero.
“When the Central Bank issues a currency, it will be responsible of maintaining its purchasing power. But the Bitcoin is not under any Central Bank’s control,” said a source at the BDL. The source did not confirm or deny whether any transactions are currently being conducted with the ‘Bitcoin’, locally.
Transactions conducted through virtual money give room to criminal activities, especially money laundering and terrorism financing, the BDL warned.
Another risk is that incorrect and unauthorized transactions using ‘Bitcoins’ cannot be cancelled.
The ‘Bitcoin’ was created in 2008 by a developer named Satoshi Nakamoto, who published the ‘Bitcoin Protocol’ outlining the theory of a decentralized currency. This was followed in January 2009 by the release of the open-source Bitcoin software.
Reported by Leila Rahbani
Date Posted: Jan 08, 2014