Lebanon's dollar market moved into WhatsApp groups after the banks failed

After Lebanon's financial system collapsed in 2019, the country's dollar market moved into WhatsApp. Roughly 100 groups dedicated to buying and selling US dollars sprang up, letting exchangers like Mohamad — a former chef turned freelance currency dealer who asked not to be fully named because his business is technically illegal — scan the going rate while regular customers ping in orders. On one April 2022 day, a seller in Jbeil offered $1,200 at 26,250 lira to the dollar; a buyer in Bourj Hammoud wanted $1,500 at 26,200.

The groups work as a live order book: exchangers profit from commissions and by arbitraging the hour-by-hour spread, delivering cash by motorbike, sometimes on house calls for trusted clients. The official rate remains frozen at 1,507.5 lira to the dollar, unchanged since 1997, while the parallel market — the operative market for nearly all transactions — has taken the pound down 95 percent since 2019. Banks cap withdrawals, hospitals insist on dollars, and the central bank's Sayrafa platform offers yet another rate.

Price formation is opaque. Mohamad Faour, a finance professor at the American University of Beirut, estimates black-market turnover at only a few million dollars a day — enough that a few hundred thousand dollars of orders can move the rate — and suspects large exchange houses are 'running the show'. Exchangers and traditional exchange houses, initially rivals, now sometimes fill each other's orders when one side lacks customers.

Chat groups as order books: about 100 WhatsApp groups broadcast bid and ask rates, and motorbike exchangers match and settle trades the banks can't.

Banks froze dollar withdrawals, so the economy needed a currency market the banks could no longer host.

WhatsApp groups provided real-time price discovery with built-in trust networks of repeat customers.

Arbitrage commissions gave independent exchangers a living for supplying liquidity the banks wouldn't.

Earlier controls — blocked rate-tracking websites, crackdowns on non-compliant exchange houses — pushed trade to informal operators.

When formal market infrastructure dies, the replacement gets built from the tools people already hold — chat groups became the matching engine.

Authorities largely gave up policing the parallel market and allowed exchange houses to trade openly at black-market rates; the central bank added its own Sayrafa rate in December 2021. Buyers, sellers and analysts alike expected another crash and no end to the black market, with trust in the lira, banks and government gone.