As crypto adoption continues to soar worldwide, Morocco is set to become one of the nations with a bill regulating cryptocurrency use.
Morocco’s central bank, Bank Al-Maghrib (BAM), was reported in March 2022 to be in a serious dialogue with the International Monetary Fund (IMF) and the World Bank (WB) alongside other European central banks over creating a regulatory scheme for the exchange of cryptocurrencies.
The governor of the Bank Al-Maghrib, Abdellatif Jouahiri, had previously explained that the nation could not adopt cryptocurrency because there was no policy protecting its citizens from the volatile nature of the market. However, he admitted that adopting cryptocurrencies was a matter of when not if.
“Given the absence of a legal framework governing cryptocurrencies nationally and internationally, we cannot as yet adopt cryptocurrencies. Cryptocurrency is the future, and dissociating yourself from it is refusing to accept the future,” Jouahri admitted while stating the risk affiliated with digital currencies.
There have been several doubts concerning the dubious use of cryptocurrencies for money laundering and cybercrimes because they are created and managed within a decentralized blockchain, enhancing anonymity,
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Morocco set to launch crypto bill
According to a report from Chainalysis, the crypto market has been growing substantially in the Middle East and North Africa (MENA) region. It is among the fastest-growing crypto sectors all across the globe. For instance, Morocco went from 2.4% of the population owning crypto to 3.1% in just a year.
Soluna, a computer application company, installed the first blockchain-powered wind farm in Dakhlam, which happens to be the southern district of Morocco, and is also supposed to be the windiest district.
A few days ago, a Moroccan news outlet reported that a draft crypto law that aims to shield individuals from the risks popular within the cryptocurrency ecosystem is set to launch very soon after a series of deliberation and underlying workings.
The law is set to be presented to stakeholders in Morocco. The Moroccan Capital Markets Authority (AMMC), the Insurance Supervisory Authority (ISA), and the American Council on Pension and Social Security (ACAPS) are among the market participants who will play an essential role in determining the flow of the regulatory process.
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As reported by Bitcoin.com News in early 2022, the BAM sought the International Monetary Fund (IMF) and the World Bank’s perspectives on what would be considered crypto regulation best practices. In addition, the central bank was also reported to have created a council that oversaw regulations governing both cryptos and central bank digital currencies.
Additionally, the central government of Morocco had gotten in touch with the central banks of France, Sweden, and Switzerland to research the regulatory situations of these countries, which have previously had experience with digital assets.
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What does this mean for other North African countries?
According to a report by Chainalysis, the Middle East and North Africa (MENA) may be one of the smaller crypto markets in the 2022 Global Crypto Adoption Index, but it is also the fastest growing. MENA-based users received $556 billion in cryptocurrency from July 2021 to June 2022, 48% more than they received the year prior.
Algeria, Egypt, and Tunisia have placed official bans on cryptocurrency trading. Algeria currently prohibits the use of cryptocurrency following the passing of a financial law in 2018 that made it illegal to buy, sell, use or hold virtual currencies.
In the same vein, the Central Bank of Egypt reiterated its warning that whoever violates the decision of the crypto trading ban may be punished with a fine of up to LE10 million in September 2022.
In the Middle East and Northern African (MENA) region, central banks are responsible for driving the evolution of these technologies. These institutions are responsible for leading, regulating, and exerting inordinate power in setting government policies.
Because these regions are primarily Muslim, Islamic finance guides these banks. The MENA region is one of the world’s resource-rich regions. Hence, it is home to the world’s largest Islamic banks, serving Muslims and other communities worldwide and basing their decisions on Islamic finance beliefs.
Islamic finance includes a set of practices accompanying a legal guideline that abides by Islamic laws and beliefs, such as banning interest and promoting ethical investments that follow the Qur’an. In effect, it calls for adopting impact-oriented economic activities and resource allocation to satisfy all community members’ material and social needs.
As members of the communities continue to show interest in cryptocurrency, it has become pertinent for the central banks of MENA nations to find regulations that protect their citizens. Over the coming months, more countries in the region are expected to follow Morocco’s path if more citizens continue to show interest.
For instance, despite the restrictions in Egypt, a Chainalysis report indicated that many Egyptians continued to use crypto for remittance payments and savings following the crash of the fiat currency.
A preview of the Chainalysis report said: “In Turkey and Egypt, fluctuating cryptocurrency prices have coincided with rapid fiat currency devaluations, strengthening the appeal of crypto for savings preservation. The Turkish Lira has inflated by 80.5 percent in the last year; the Egyptian Pound has weakened by 13.5 percent.”
When the Moroccan crypto bill is launched, other north-African nations like Algeria, Egypt, and Tunisia will be observing its efficacy. They will seek similar ways to tap into the fast-growing crypto market while protecting its citizens from its volatile nature.