Tokenized remittance governance in Lebanon’s financial crisis: a compliance-by-design framework

Purpose This study aims to examine how tokenized remittance infrastructure can be governed in crisis-affected economies where domestic financial institutions have lost credibility. Existing studies often examine cryptocurrencies, stablecoins and Central Bank Digital Currencies (CBDCs) as separate instruments, with less attention to how remittance-focused tokenization can be governed under crisis conditions. Focusing on Lebanon, the study develops a compliance-by-design framework built around CedarWave (CDW), a USD-indexed payment token and CedarSave (CDS), a micro-savings token linked to balance retention and liquidity recycling. Design/methodology/approach The study adopts a qualitative, design-oriented approach combining comparative case analysis, regulatory mapping and Design Science Research (DSR), structured around four explicit research questions and a formal DSR artifact-evaluation cycle. It compares cryptocurrency, stablecoin and CBDC experiences in selected crisis or weak-institution contexts and uses these insights to develop and conceptually evaluate a Lebanon-specific tokenized remittance model. The evaluation is scenario-based and conceptual rather than empirical; no field pilot, expert validation or quantitative simulation was conducted. Findings The analysis shows that unregulated cryptocurrencies reveal demand for alternatives to failed financial channels but remain constrained by volatility, informality, consumer-protection concerns and compliance risks. CBDC-based approaches face trust, usability and implementation barriers in weak-institution environments. Regulated stablecoin-based models offer a more practical intermediate pathway, provided they are supported by credible reserves, redemption rights, AML/KYC controls, consumer protection and external regulatory anchoring. These findings are design propositions derived from comparative and conceptual analysis rather than demonstrated empirical results. Originality/value The study’s contribution is modest and specific rather than broad: it applies and synthesizes established stablecoin-governance and compliance-by-design concepts, which are not novel in themselves, to a Lebanon-specific remittance-corridor problem, and it separates payment stability from savings incentives through an explicit dual-token design. The originality lies in the Lebanon-specific regulatory anchoring logic and the remittance-corridor governance model, not in the underlying token architecture, which resembles existing regulated stablecoin-plus-governance-token designs. The study contributes to digital policy, regulation and governance research by reframing remittances as governed payment infrastructure rather than only private transfers. It proposes a conceptual dual-token architecture linking blockchain settlement with MiCA- and UAE-oriented safeguards, proof-of-reserves, Travel Rule compliance, transaction monitoring and circuit breakers. The framework proposes a conceptual evaluation structure, organized around governance quality, compliance coverage, settlement efficiency and user protection, to guide future empirical testing rather than reporting results from applied testing here.