It's all very safe though. There is some guy standing around the corner with an ak behind a counter, and you can be sure 7.62mm size holes end up in the head of anyone who would try to rob the people doing the exchange. On one occasion the money trader made a very obvious calculation heavily in my favor, that he likely did not intend to make. I tried to walk away quickly with the money, and 3 men chased me down. I'm quite sure if I had stolen the money instead of merely gotten "lucky" they would have chopped an arm off instead of nicely asking to reverse the transaction (which I found wise to do).
The whole thing could be extended to BTC quite easily, and it's been awhile since I've been to the ME but it wouldn't surprise me if they've already added BTC to the mixup. From a western perspective it sounds insane to hear large sums of cash could potentially be traded easily and readily in a relatively "impoverished" nation on the street but for these people it's just regular business in the cash-economy world they live in.
If the banking system doesn't let people use their own money that they've deposited, I don't see what else he can do.
Whether you're talking USD or Lebanese Pounds, you could fit this into something much smaller (eg. an envelope, with reasonably large denominated bills).
Somewhere your money has to go into the countries financial systems. Which makes sense. Money isn’t just for trade. It’s to exert soft power.