Morocco set to legalize crypto after 2017 ban

The authorities banned crypto assets in November 2017 as concerns about their potential use for illegal activities arose.

Photo: depositphotos

Key Takeaways

• Morocco is drafting a law to regulate crypto assets, moving away from its 2017 ban.
• The central bank is considering a CBDC to improve financial inclusion and control over digital currencies.

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Morocco is set to legalize crypto assets after a ban that has been in place since 2017, Reuters reported Tuesday. The legislation is intended to provide a legal framework for crypto transactions and usage in the country.

Abdellatif Jouahri, the governor of Morocco’s central bank, Bank Al Maghrib (BAM), said the bank is preparing a draft law aimed at regulating crypto assets, which is now in the adoption process.

BAM is also exploring the possibility of introducing a central bank digital currency (CBDC). Jouahri said that many countries are assessing the role of CBDCs in achieving public policy objectives, particularly in promoting financial inclusion.

“Regarding central bank digital currencies, and like many countries around the world, we are exploring to what extent this new form of currency could contribute to achieving certain public policy objectives, particularly in terms of financial inclusion,” Jouahri stated.

Unlike decentralized crypto assets, a CBDC would be under the direct control of the central bank.

Currently, 134 countries are exploring central bank digital currencies (CBDCs), according to data tracked by the Atlantic Council. The figure represents a leap from just 35 nations in May 2020.

Among these, 66 countries are in advanced stages of exploration, which includes development, pilot testing, or full-scale launches. Data also shows that all G20 nations are exploring CBDCs, with 19 of them reaching advanced exploration stages.

Morocco banned crypto trading in 2017 primarily due to concerns about the risks associated with their use. The Moroccan central bank warned the public about the potential for crypto assets to be used in illicit activities, including money laundering and terrorist financing.

In November 2017, the Office des Changes, responsible for regulating currency exchange in Morocco, issued a public statement declaring that transactions involving virtual currencies were illegal and subject to penalties under existing laws.

The regulatory environment at that time was influenced by global skepticism towards crypto, as many countries were issuing warnings about the unregulated and volatile nature of digital assets.

Despite the existing ban, Moroccans have continued to use digital assets through underground channels.

Bolivia, the first country that enacted a full ban on crypto, announced earlier this year that it would lift this ban to modernize its payment system. Financial institutions are permitted to engage in transactions involving digital assets.

China started restricting crypto in 2013, which was then escalated to an outright ban in 2021. The People’s Bank of China (PBOC) first prohibited financial institutions from dealing with crypto assets and later banned all crypto transactions, including initial coin offerings and domestic exchanges.

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