The Moroccan government has made an unexpected shift from its strict ban on cryptocurrencies to embracing and planning to regulate digital assets.
Morocco's Transition: From Ban to Regulation
In 2017, Morocco banned cryptocurrencies, citing financial instability, terrorism financing, and money laundering. However, in 2024, Morocco's financial landscape is undergoing significant changes. Bank Al-Maghrib announced its plan to draft crypto regulations, highlighting a move to integrate cryptocurrencies into the formal economy. This shift aligns Morocco with countries that were initially critical of crypto but are now developing frameworks for its use. The move aims to enhance financial inclusion, as 42% of the population remains unbanked.
Crypto's Rise in the Underground Economy
Despite the 2017 ban, cryptocurrencies have thrived in Morocco's informal economy. In 2023, Morocco was ranked among the top countries for crypto adoption according to Chainalysis and 13th in Bitcoin usage by Insider Monkey. Cryptocurrency ownership rose from 2.4% of the population in 2021 to 3.1% in 2022. The lack of regulation pushed crypto into unregulated markets, exposing risks and highlighting the need for formal rules.
Challenges and Issues Ahead
Adopting cryptocurrency in Morocco holds promise but comes with challenges. The government must implement clear regulations for exchanges and transactions, including AML and KYC measures. Reliable technological infrastructure and integration with traditional banking are needed, along with public education to promote understanding. Cybersecurity measures are crucial to protect against fraud and hacking. International collaboration will help Morocco align its policies with global standards.
Morocco's shift from a comprehensive ban to incorporating cryptocurrencies has the potential to enhance financial inclusion and revitalise the financial economy, albeit with significant hurdles to overcome.
