Many governments are wary of digital assets and have advised their citizens to stay away, fearing disruption to their monetary system. Then a few went all out and banned digital assets altogether. Morocco ranks among the latter, but with adoption booming even amid the ban, the North African country is reconsidering its stance.
Morocco banned digital assets in November 2017, as the market experienced its first major bull market and an implosion of ICOs. That year most governments took notice of digital assets, with many issuing warnings against “unregulated and volatile” assets.
It was also a year in which several large companies began to explore digital currency payments. In Morocco, MTDS, a local web hosting service provider, was among those who took the bold step and started accepting digital currency payments, a move that accelerated the government’s anti-digital currency stance. .
The crackdown was led by the country’s Foreign Exchange Office, which claimed that digital currency transactions constitute a “breaking of foreign exchange regulations” and are punishable under Moroccan law.
“This is a hidden payment system that is not backed by any organization, the use of virtual currencies carries significant risks for their users,” he said.
A lot has changed since then, but the ban still stands.
But despite this ban, Morocco remains one of Africa’s largest digital currency hubs, with 2.4% of the population owning at least one digital asset. Data from Useful Tulips shows it is the leader in digital asset ownership in North Africa, ranking ahead of Egypt (where BTC is also banned). Morocco ranks only behind Nigeria, South Africa and Kenya on the continent as a whole.
As in every other country where digital currencies are popular, there is a good share of Moroccans in the industry for speculation and quick money. However, the country is expected to benefit more from digital assets than other African countries where Bitcoin is popular.
On the one hand, only 30% of Moroccans have access to banking services. This population would be greatly served by a real-time, low-cost, peer-to-peer digital cash system like Bitcoin SV. By comparison, Kenya’s banked population is at 85%, while Nigeria is at 60%.
Morocco’s central bank, known as Bank Al-Maghrib, is realizing the potential of digital assets. Since this year, it has been working with the International Monetary Fund (IMF) and the World Bank on industry regulations to eventually lift the ban. Reports have emerged that the bank wants to ensure it can mitigate the risks posed by digital assets, such as the potential for money laundering and terrorist financing, before lifting the ban.
The country’s openness to Bitcoin was visible a few weeks ago when it hosted the IEEE 5G-IoT Blockchain Global Summit. The event saw prominent guests from around the Bitcoin world take the stage to discuss how the country can harness blockchain to move forward and solve its most pressing challenges, led by Bitcoin creator Dr. Craig Wright.
Watch: Highlights from the IEEE 5G-IoT Blockchain Rabat Global Summit: Imagining a world with 10 billion TPS
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