Morocco is poised to lift its 2017 ban on cryptocurrencies, introducing legislation aimed at creating a regulated framework for crypto transactions.
This marks a significant shift in policy as the country seeks to embrace the growing global trend of digital assets while addressing concerns about their misuse.
The Bank Al Maghrib (BAM), Morocco’s central bank, is spearheading this effort, with a draft law currently in the adoption process.
Alongside this, BAM is also exploring the feasibility of introducing a central bank digital currency (CBDC) to enhance financial inclusion and align with global advancements in financial technology.
Central bank focuses on regulation, not prohibition
The Bank Al Maghrib’s proposed legislation intends to regulate, rather than restrict, cryptocurrency use.
Abdellatif Jouahri, the central bank’s governor, has confirmed that the draft law aims to provide clarity and oversight for digital assets within the country.
The focus is to mitigate risks associated with illicit activities, such as money laundering and terrorist financing, while creating a safe environment for crypto usage.
BAM’s approach mirrors a growing global consensus on the need for regulation in the crypto sector.
By introducing formal guidelines, Morocco aims to legitimise crypto activities and support technological innovation within its financial ecosystem.
Exploring a Moroccan central bank digital currency
In tandem with regulating cryptocurrencies, BAM is actively investigating the potential benefits of a central bank digital currency.
Governor Jouahri highlighted that CBDCs could play a pivotal role in advancing public policy objectives, particularly in promoting financial inclusion.
Unlike decentralised crypto assets, a CBDC would fall under the direct oversight of the central bank, ensuring greater control and stability.
Globally, interest in CBDCs is surging.
According to the Atlantic Council, 134 countries are currently exploring CBDCs, a dramatic rise from just 35 in May 2020.
Of these, 66 nations have progressed to advanced stages of exploration, including development, pilot testing, or full-scale launches.
Among G20 economies, 19 have reached advanced exploration stages, showcasing the global momentum behind digital currencies.
Morocco’s shift from scepticism to adoption
Morocco’s journey with crypto has been marked by cautious scepticism.
The country initially banned cryptocurrency trading in November 2017, citing risks associated with unregulated digital assets.
Concerns ranged from their potential misuse in money laundering to their role in funding illicit activities.
The Office des Changes, Morocco’s currency exchange regulator, declared all crypto transactions illegal, enforcing penalties under existing laws.
The regulatory stance in 2017 reflected global apprehension about cryptocurrencies’ volatility and risks.
Morocco’s underground crypto market has continued to thrive, with citizens accessing digital assets through informal channels despite the prohibition.
Global trends influencing Morocco’s policy shift
The international push toward crypto adoption and regulation has likely influenced Morocco’s change in stance.
As major economies explore CBDCs and regulatory frameworks, smaller nations like Morocco recognise the potential benefits of integrating digital assets into their financial systems.
Regulated crypto activities could attract investment, spur innovation, and enhance financial inclusion, particularly for underserved populations.
Countries across Africa, including Nigeria and South Africa, are making strides in digital currency adoption.
Morocco’s move to regulate cryptocurrencies could position it as a leader in North Africa, aligning its financial sector with global trends while addressing security concerns.
What lies ahead for Morocco’s crypto market?
The introduction of a regulated framework and potential CBDC signals Morocco’s intention to balance innovation with oversight.
If successfully implemented, these measures could unlock new opportunities for the country’s financial sector, enabling it to capitalise on the growing global interest in digital currencies.
For Moroccan citizens, this could mean safer access to digital assets and increased participation in the evolving digital economy.
As Morocco transitions from a blanket ban to regulation, the success of its initiatives will depend on robust enforcement mechanisms, public awareness campaigns, and collaboration with international regulatory bodies.
The post Morocco to legalize cryptocurrency after six-year ban: what changed? appeared first on Invezz
