Tuesday, January 31, 2023
  • Morocco recently announced, through its Central Bank, that it would soon unveil a Cryptocurrency Regulation Bill
  • Morocco was the first African country to ban cryptocurrency
  • The goal of the Moroccan Central Bank is to find a balance between consumer protection and innovation adoption

Morocco recently announced, through its Central Bank, that it would soon unveil a Cryptocurrency Regulation Bill. This marks a turnaround from the hardline stance that Morocco had taken against using Bitcoin and cryptocurrency in the country.

While the regulation is some way off, there’s much to look forward to. The country will join a short list of African countries that have progressed towards cryptocurrency or adopted cryptocurrency as legal tender. Morocco is well placed for cryptocurrency adoption, but the Central Bank is working with the International Monetary Fund and the World Bank to establish best practices.

  • Morocco was the first African country to ban cryptocurrency
  • Regulatory coming soon
  • Cryptocurrency adoption is inevitable

Read: How bitcoin is advancing the human race

Morocco’s Cryptocurrency Ban

Morocco had a complete ban on the use of cryptocurrency in the kingdom that was established in 2017. Morocco was the first North African country to ban cryptocurrency. Bank Al-Maghrib (BAM), the Moroccan Central Bank, cited significant risks for users when they placed the ban. While a first in the region, this ban did not impact Moroccans.

Statistics from cryptocurrency aggregator Triple-A suggest that 2.4% of Morocco’s population own cryptocurrency. Morocco is well poised for cryptocurrency, with 84.1% of the population having internet access in 2020. The ban was also meant to curb money laundering and possible financing for terrorism.

Regulatory Framework coming soon

While the framework is on its way, the Central Bank has clarified some things. The International Monetary Fund has preferred caution in adopting cryptocurrency, as we have seen with El Salvador and the Central African Republic’s bitcoin adoption.

The goal of the Moroccan Central Bank is to find a balance between consumer protection and innovation adoption. Given the ownership of cryptocurrency despite the ban, the BAM has changed its stance to prefer oversight of cryptocurrency to completely banning it. This is a good sign for cryptocurrency enthusiasts in the region and continent.

A working framework that has international institutions’ buy-in will guide the way for many other countries as they find their feet in cryptocurrency.

Cryptocurrency Adoption Inevitable

Cryptocurrency adoption is seen as inevitable in Africa and the world at large. Much like the case of Morocco, the adoption takes a bottom-up approach, from the citizenry to the officials, rather than the top-down approach.

African governments, many of whom have taken hard-line stances against the use of cryptocurrency, will have to soften their approach or risk getting left behind. In Morocco’s case, the country ranks in the top  50 in terms of cryptocurrency holding per capita in the world. Cryptocurrency is thriving in African countries despite bans and measures against it.

Dominoes

Morocco’s cryptocurrency ban was the first domino to fall in the North African region. Other member states followed suit. We must also consider the fact that Islamic Law forbids speculative earning. Cryptocurrencies, particularly Bitcoin, are viewed as speculative assets.

The movement by Morocco towards regulation could well signal another first domino, this time towards the side of regulation. Not just for North Africa but the African continent as a whole. Many countries with bans on cryptocurrency still have high trading and ownership rates, just like Morocco.

The regulatory framework and ultimate regulations will have many questions to answer. More so in light of the current crypto winter. How will it protect consumers? What safeguards will it have to support Anti Money laundering and Counter Financing for Terrorism?

How will they deal with the matter of profit given the Islamic principles? Will the involvement of the IMF and World Bank work for or against the effectiveness of the regulation? Some if not all of these will soon be answered when the BAM unveils its regulation for cryptocurrencies.

Read: How the Federal Reserve affects the entire cryptocurrency market

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