Morocco to Legalize Cryptocurrency with New Draft Law Under Review

Highlights:

• Morocco is set to legalize cryptocurrency after banning it in 2017 due to concerns about illicit activities.
• To enhance financial inclusion and control over digital transactions, the central bank examines a central bank digital currency.
• The draft legislation is meant to establish a secure framework for crypto use while minimizing risks associated with it.
  

Morocco is set to legalize cryptocurrency after banning it in 2017. The move comes as the country drafts a law to regulate digital assets. The legislation aims to address public concerns while fostering financial innovation.

JUST IN: 🇲🇦 Morocco to legalise #Bitcoin and crypto following the ban in 2017. pic.twitter.com/Zv0Ii1JIO2

— Bitcoin Magazine (@BitcoinMagazine) November 26, 2024

A Draft Law in Progress

Morocco’s central bank, Bank Al-Maghrib has drafted a law on regulating cryptocurrencies. The legislation was announced by central bank governor Abdellatif Jouahri in a recent international conference in Rabat.

In 2017 Morocco banned cryptocurrencies, citing they posed risks such as money laundering and terrorist financing. Crypto transactions continued underground despite the restrictions showing the growing local interest in digital assets. Officials now want to tackle these challenges in a structured manner while promoting new ideas.

Exploring a Central Bank Digital Currency

In addition to regulating crypto, Morocco is exploring a central bank digital currency (CBDC). According to Jouahri, a CBDC could support public policy goals like financial inclusion. CBDCs operate under direct central bank control, unlike decentralized cryptocurrencies, providing greater regulatory oversight.

Jouahri highlighted Morocco’s alignment with global trends. Many countries are studying CBDCs to modernize financial systems and enhance economic inclusivity. Morocco’s exploration of a CBDC reflects its commitment to integrating modern financial tools.

Global Trends Drive Change

134 countries are exploring CBDCs globally, with 66 are in advanced stages such as testing and implementation. Digital currencies are being actively considered by all G20 nations. This global momentum also matches Morocco’s move to legalize and regulate cryptocurrencies.

Morocco’s first ban of crypto was due to concerns over its unregulated nature. Authorities warned that digital assets could be misused for illicit activities. However, the increased use of cryptocurrencies through peer-to-peer platforms demands a regulated framework.

Balancing financial innovation with user protection is the focus of the new draft law. Morocco has collaborated with the International Monetary Fund as well as the World Bank in order to ensure the proposed framework counter the risks.

Reconsidering the 2017 Ban

The shift to legalize cryptocurrencies in Morocco represents a major change in the country’s policy stance. It was banned in 2017 because there was uncertainty about the volatile nature and the non regulation of the use of the digital assets. However, the increasing usage of cryptocurrencies around the world has prompted for a change of course.

Despite the ban, it is estimated that around 1.15 million Moroccans are involved in the trade of crypto. The sheer amount of use in itself requires regulation. Morocco seeks to promote innovation and safeguard users through modifying previous issues on innovation. The move follows other country’s actions toward legalization. Earlier last year, Bolivia issued a ban on cryptocurrency and decided to lift it. The shift intended to upgrade payment systems and enable financial institutions to conduct transactions of digital assets.

El BCB, en coordinación con la ASFI y la UIF, a fin de modernizar el sistema de pagos, emite la Resolución de Directorio 084/2024, respecto al uso de los Activos Virtuales.

Lee la nota completa: https://t.co/37Zpgg0V62#UnPaísUnidoEsUnPaísFuerte #ElBCBGarantíaDeLaEstabilidad pic.twitter.com/PX1uai8BeY

— Banco Central de Bolivia (@BancoCentralBO) June 26, 2024

Moreover, China banned the use of cryptocurrencies first in 2013 and extended the restriction in 2021. The Central Bank of China prohibited financial institutions from dealing with crypto and went ahead to ban all transactions, including domestic exchanges and initial coin offerings (ICOs).