Cryptocurrencies and Financial Crime on the Rise in Morocco Despite Ban

Despite a nationwide ban on cryptocurrencies, possession of digital currencies has increased significantly in Morocco. According to recent figures, over 3.1% of the country’s population owns some form of cryptocurrency, making it one of the leading countries in Africa in terms of crypto adoption.

A Shift from Ban to Regulation

Morocco’s central bank, Bank Al-Maghrib (BAM), learned a valuable lesson when it banned cryptocurrencies nationwide. The move failed to slow down the adoption of blockchain technology, and instead, the country has opted for a regulatory approach. Through discussions with international bodies such as the International Monetary Fund (IMF) and other countries, Morocco is paving the way for the legal introduction of cryptocurrencies.

Growing Ownership Rates

Despite the current ban on possession and trading of cryptocurrencies, ownership rates have steadily increased from 2.4% in 2021 to 3.1% in 2022, making it the highest rate in North Africa. A recent analysis by the Moroccan Institute for Policy Analysis (MIPA) concluded that Morocco is taking a wait-and-see approach due to concerns over losing control over economic and monetary sovereignty.

The Decentralized Threat

The decentralized nature of cryptocurrencies poses a significant threat to the country’s central bank and banking sector, which are main actors in the ecosystem. As adoption grows, there is increasing pressure on financial regulators to create a legal framework for cryptocurrency transactions. The introduction of crypto-based money transactions would also mean that the Moroccan central bank would have little control over capital flight, as transactions on the blockchain are not bound by geographical borders.

Opportunities and Challenges

The MIPA analysis concludes that while the central bank is cautious in its approach to cryptocurrencies, it has much to gain from the technology. The decentralized nature of cryptocurrencies presents both opportunities and challenges for the economy.

A Growing Trend Across Africa

Morocco is not alone in Africa in its enthusiasm for cryptocurrencies. The lack of access to traditional financial services has led many citizens to turn to digital currencies as an alternative. According to World Bank estimates, over half of African residents do not have a bank account, and cryptocurrencies offer a way to bridge this gap.

Young People Drive Adoption

The trend is driven particularly by young people who have access to smartphones but not traditional financial institutions. As the adoption of cryptocurrencies continues to grow, it remains to be seen whether Morocco will follow other countries in creating a legal framework for cryptocurrency transactions.

Quote from Governor Abdellatif Jouahiri

In an interview, Abdellatif Jouahiri, Governor of the Central Bank of Morocco, expressed confidence in the country’s crypto project, stating that it was ready to move forward with discussions with stakeholders.