Morocco wants to legalize the use of Bitcoin and Co.

Abdellatif Jouahri, the governor of Morocco's central bank - known as Bank Al-Maghrib - announced today at an international conference in Rabat that a law is currently being prepared in Morocco to allow the use of cryptocurrencies.

Bitcoin and Co. have been banned in Morocco since 2017, but ownership is steadily increasing and has one of the highest adoption rates in North Africa. The proportion of the population that owns cryptocurrencies and uses them underground rose from 2.4% in 2021 to more than 3.1% in 2022.

The use of cryptocurrencies is also on the rise across the entire African continent, mainly due to the fact that more than half of the population does not have a bank account. This is compounded by the unstable economy and national currency in some countries. Bitcoin offers financial inclusion, a technology for saving and protection against inflation as well as the possibility of making necessary transfers back home (remittances) at lower fees.

However, the Moroccan central bank's regulatory approach is not new. Last year, following talks with the International Monetary Fund (IMF), the legal introduction of cryptocurrencies and a framework for transactions with them were put on the table. Jouahiri explained that the plans had long since been finalized and still needed to be discussed with the various interest groups.

Due to concerns about the threat posed to the banking sector by decentralized cryptocurrencies and the lack of control over capital flight, which ultimately led to the crypto ban in 2017, the central bank still took a wait-and-see approach. However, the increasing spread of crypto-assets could no longer be ignored and the draft law is now in the process of being adopted.

At the same time, Bank Al-Maghrib is also planning to introduce a central bank digital currency (CBDC), the e-dirham. Unlike Bitcoin and the like, this will be controlled by the central bank.

As far as central bank digital currencies are concerned, we - like many countries around the world - are investigating the extent to which this new form of currency could help to achieve certain public policy objectives, particularly in the area of financial inclusion.
_{Abdellatif Jouahri, Governor of the Central Bank of Morocco}

In order to promote the introduction and acceptance of the e-dirham, the central bank wants to highlight the advantages of the digital economic system and is also calling for support from the government in the form of an extensive financial education campaign. The aim is to convey that the introduction of the e-dirham will revolutionize Morocco's economy, increase currency security and modernize financial transactions, reports the African Press Agency (APA). It is the beginning of a new era for the Moroccan economy and offers unprecedented opportunities in terms of security and financial transparency. Payment transactions are to be made more secure and crime - in the form of fraud, theft, money laundering or corruption - minimized through better tracking. The CBDC is also intended to reduce the population's dependence on cash and therefore its use. Cash currently accounts for 30 percent of Morocco's gross domestic product (GDP).

However, the Moroccan population is very skeptical about mobile wallets and the traceability of transactions. From this point of view, it can ultimately be assumed that the planned legalization of cryptocurrencies is not only an attempt by the central bank to provide an answer to the increasing spread of cryptocurrencies in general, but also to sensitize the population with regard to CBDC.