Libya, a North African nation of approximately 7 million people, finds itself navigating one of the most complex financial landscapes on the continent. The country’s banking sector operates against a backdrop of political fragmentation, institutional upheaval, and a persistent cash crisis that shapes everyday life for ordinary citizens. Against this reality, questions about open banking and modern financial infrastructure take on a different character than they might in more stable markets.
So where does Libya stand on open banking? The short answer: it is not happening, and it is not on the immediate agenda. But the longer answer reveals a more nuanced picture, one where certain foundational developments could, over time, create conditions for data sharing and financial innovation.
To understand Libya’s current financial trajectory, one must first understand what happened in late 2024. The Central Bank of Libya operates in an environment shaped by rival governments and dual spending systems, a division that has long complicated monetary policy and financial reform efforts.
In August 2024, this tension reached a breaking point. The CBL found itself caught between competing political factions, with the bank calling on legislative and executive authorities to intensify efforts to end the ongoing political and institutional division.
The crisis culminated in a leadership transition. The period saw significant currency volatility, with the exchange rate fluctuating between 5.39 and 6.33 Libyan dinars per US dollar. Following UN-mediated negotiations, Naji Mohamed Issa Belqasem was appointed as the new Governor of the Central Bank of Libya, a rare moment of consensus among the country’s divided political institutions.
This matters for the open banking conversation because any strategic initiatives announced under the previous leadership effectively reset. The new administration inherited a banking sector in crisis and had to establish different, more immediate priorities.
Walk through any Libyan city today, and you will likely encounter queues outside bank branches. This is the defining feature of Libya’s current financial reality.
The roots of this crisis run deep. Political instability has eroded trust in formal banking institutions. Many Libyans and businesses prefer to hold cash outside the banking system, fearing they will be unable to withdraw funds when needed. This behaviour, while rational at the individual level, deepens liquidity shortages within banks and creates a self-reinforcing cycle.
The situation intensified in mid-2025 when the CBL began withdrawing LD47 billion in banknotes from circulation. While intended as a monetary management measure, pulling such a large sum of notes out of circulation before replacement currency was ready exacerbated the crisis further. The CBL subsequently contracted to print LD60 billion worth of new banknotes, but the transition period created significant hardship.
The CBL has had to temporarily draw on a portion of its foreign currency reserves to maintain exchange rate stability. According to official statements, total foreign assets exceed $94 billion, of which $84 billion are reserves managed by the CBL.
Here is where the story takes an interesting turn. The very severity of the cash crisis has accelerated digital payment adoption in ways that years of strategic planning might not have achieved.
According to CBL data covering January through November 2025, electronic banking showed remarkable growth. November 2025 recorded the highest value of electronic payment transactions in Libyan history, reaching LD43.8 billion (approximately $6.9 billion at the official rate of around 6.3 LYD/USD) in a single month. Cumulatively, Libya processed LD328 billion in electronic transactions during the first eleven months of 2025, a historic achievement for the sector.
The irony is not lost on observers: while the withdrawal of old currency denominations depressed markets and deepened the cash crisis, it simultaneously forced increased adoption of e-banking and e-payments. Necessity, rather than policy, became the primary driver of digital transformation.
This organic shift toward digital payments creates interesting possibilities. A population that learns to trust electronic transactions, even if initially by necessity rather than choice, represents a foundation upon which more sophisticated financial services could eventually be built.
One concrete piece of modernisation that has moved forward is LYPay, the Central Bank of Libya’s instant payment platform. Designed to enable fast, secure interbank transactions, LYPay represents genuine progress in payment infrastructure.
The CBL has instructed commercial banks to introduce instant payment services using QR codes via mobile phones at point-of-sale devices. Banks are coordinating with Moamalat Financial Services to roll out these capabilities. While implementation remains uneven, the technical foundation for real-time domestic payments now exists.
This matters for any future open banking discussion because instant payment rails are often a prerequisite for the kinds of account-to-account transfers and payment initiation services that open banking frameworks enable elsewhere.
In late 2025, Governor Naji Mohammed Issa announced the launch of Libya’s National Financial Inclusion Strategy 2025-2029. The strategy aims to provide safe, affordable, and easily accessible financial services, with explicit commitments to protecting personal data.
Several accompanying projects warrant attention for those watching Libya’s potential trajectory toward open banking:
The Financial Inclusion Accounts Project targets financially excluded populations, a recognition that significant segments of Libyan society remain outside the formal banking system. A Banking Data Protection System aims to ensure the confidentiality and privacy of individuals’ information, notable given Libya’s current lack of comprehensive data protection legislation. The Digital Banking Identity initiative seeks to facilitate electronic transactions through standardised identification. Perhaps most interesting is a project to enable domestic money transfers via a national platform without requiring a bank account.
None of these initiatives constitute open banking. But collectively, they address several prerequisites: digital identity, data protection, financial inclusion, and interoperable payment infrastructure. If successfully implemented, they could create conditions where conversations about data sharing and third-party access become more feasible.
Despite these developments, meaningful open banking implementation in Libya faces formidable obstacles.
The regulatory foundation simply does not exist. Libya currently has no data protection legislation. While Law No. 5/2022 on Combating Cybercrime and Law No. 6/2022 on Electronic Transactions represent steps toward digital governance, they do not provide the comprehensive framework for data sharing, consent management, and consumer protection that open banking requires. Given political and economic pressures around personal data protection, reforms may emerge in the coming years but the timeline remains uncertain.
The banking sector itself presents structural challenges. With over 70% of assets concentrated in a handful of institutions, notably Jumhouria Bank and the National Commercial Bank, Libya’s banking sector suffers from limited competition. In theory, open banking could address this by enabling fintech companies and smaller players to compete on service quality rather than balance sheet size. In practice, dominant incumbents have little incentive to support frameworks that would erode their advantages, and the regulatory capacity to mandate participation does not currently exist.
Trust remains perhaps the most fundamental barrier. Open banking depends on consumers being willing to share their financial data with third parties. In a context where many citizens do not trust banks enough to deposit their money, preferring cash under mattresses to funds in accounts, the leap to authorising data sharing with fintechs seems distant indeed.
The informal economy further complicates matters. With more than one-third of imports reportedly financed outside the banking system, a substantial portion of economic activity occurs beyond the reach of formal financial institutions. Open banking frameworks built atop a formal banking sector that captures only part of the economy would have inherently limited impact.
If Libya does eventually create conditions for open banking, what value might it deliver?
Credit access for small businesses represents an obvious opportunity. Libyan MSMEs struggle to obtain financing through traditional channels. Banks lack the data and risk assessment capabilities to confidently lend to smaller enterprises. Open banking could, in principle, enable alternative credit scoring based on transaction histories and cash flow patterns, though this requires both the technical infrastructure and the regulatory framework to support it.
The concentration of the banking sector could actually make Libya an interesting case for open banking’s competitive effects. In markets where a few large banks dominate, open banking has sometimes enabled challenger banks and fintechs to offer superior customer experiences while piggy-backing on incumbents’ infrastructure. Whether Libyan regulators would have the capacity or political will to pursue this path remains an open question.
Reducing informality is another potential benefit. If open banking made formal financial services more accessible and attractive, it could draw economic activity out of the shadows. This would benefit both individual consumers and the government’s ability to collect revenue and conduct economic planning. The causal arrow here is uncertain, however—informality in Libya stems from political and institutional factors that financial technology alone cannot resolve.
The EU-funded E-NABLE project, which ran from 2022 to 2025 with €5 million in funding, recently concluded. The project supported Libya’s economic diversification, promoted a business-friendly environment, and accelerated digital transformation across government institutions.
It is worth being precise about what E-NABLE accomplished. The project strengthened capacities at the Ministry of Economy and Trade, supported the creation of a national digital strategy, and worked to digitalise public services. It also aimed to facilitate access to finance by encouraging financial institutions to extend credit to SMEs and creating conditions for microfinance and fintech development.
What E-NABLE did not deliver was an open banking framework, an instant payment system, or an e-KYC platform, despite these appearing in some early project descriptions as aspirational goals. The gap between project ambitions and delivered outcomes reflects the challenging operating environment in Libya rather than any failure of the project itself. Building financial infrastructure in a fragmented political context is inherently difficult.
Libya’s financial sector is evolving, but open banking is not part of the near-term picture. The country’s priorities, resolving the cash crisis, stabilising the currency, building basic digital payment infrastructure, and restoring trust in banking institutions, must come first.
The developments worth watching include progress on the Financial Inclusion Strategy 2025-2029, particularly the Banking Data Protection System and Digital Banking Identity initiatives. If these succeed, they would address critical prerequisites for any future open banking framework. The continued growth of digital payments, driven by necessity if not preference, creates familiarity with electronic transactions that could eventually support more sophisticated services.
Perhaps most important is whether Libya can achieve the political stability that financial modernisation requires. The 2024 central bank crisis demonstrated how quickly institutional progress can be derailed by political conflict. Any roadmap toward open banking must account for this fundamental uncertainty.
For organisations tracking open banking developments across Africa and the Middle East, Libya represents a market to monitor rather than one where near-term engagement is likely. The building blocks are being laid, slowly, unevenly, and often inadvertently, but the structure they might eventually support remains years away.
The Central Bank of Libya publishes statistics on electronic payments and instant payment services through its official website. The E-NABLE project documentation is available through the European External Action Service. For organisations seeking to understand Libya’s financial sector, the OECD’s work on economic diversification through public-private dialogue provides useful context.
Important links
Open Banking Nigeria (Open Technology Foundation) is a non-profit backed by a group of industry experts across banking, fintech, risk management, and more to drive and launch the open banking standard in Nigeria.
