Morocco is on the brink of a major financial shift as the country prepares to lift its ban on Bitcoin and cryptocurrencies. The Governor of Bank Al-Maghrib (BAM), Abdellatif Jouahri, recently announced that a draft law to regulate crypto assets is in the final stages of approval.

From Ban to Regulation: A Strategic Transition

Cryptocurrencies have been banned in Morocco since 2017 due to concerns about financial risks and market volatility. Despite this, the use of digital assets has thrived underground. In fact, as of 2022, around 1.9 million Moroccans (4.9% of the population) owned cryptocurrency, placing Morocco among the global leaders in crypto adoption. According to Chainalysis, Morocco ranks second in Africa for crypto usage, just behind Nigeria.

The shift from prohibition to regulation reflects a growing recognition of the benefits cryptocurrencies can bring to the economy. Governor Jouahri emphasized that the central bank aims to ensure a safe and inclusive transition into the digital asset space.

Steps Toward Legalization

Morocco’s journey toward crypto legalization has been deliberate and carefully planned:

1. Early Research (March 2022): Moroccan officials engaged with international organizations such as the IMF and World Bank to study regulatory frameworks. They also consulted central banks in Sweden, France, and Switzerland to understand their approaches.
2. Drafting the Bill (June 2022): BAM announced its intent to develop a Cryptocurrency Regulation Bill, collaborating with global financial institutions to create a balanced framework.
3. Fintech Support (August 2022): The Moroccan Capital Markets Authority (AMMC) launched a fintech portal to encourage innovation and collaboration in the financial sector.
4. Completion of the Framework (December 2022): Governor Jouahri confirmed that the crypto regulation framework was finalized and ready for consultation with stakeholders.

Why Regulation Now?

The move to regulate instead of banning cryptocurrencies signals Morocco’s growing acknowledgment of the digital economy’s potential. The central bank has highlighted financial inclusion as a key motivation. By regulating crypto assets, Morocco aims to bring more people into the formal financial system, addressing challenges faced by the unbanked population.

In addition to regulating cryptocurrencies, BAM is also exploring the creation of a central bank digital currency (CBDC). This new form of digital money could further enhance financial inclusion and modernize the financial sector.

Morocco’s shift from banning to regulating cryptocurrencies marks a significant transformation in its financial policy. By embracing digital assets, the country is positioning itself as a forward-thinking player in the global financial landscape, ready to leverage the benefits of blockchain and fintech innovation.