Morocco Prepares to Legalize Crypto, Ending a Decade-Long Ban

Morocco is on the cusp of transforming its stance on cryptocurrency, revisiting its 2017 ban as the nation drafts new regulations aimed at embracing the digital asset revolution. This shift aligns with a global trend toward cryptocurrency adoption and regulation, fueled by the rising prominence of blockchain technology in financial systems worldwide.

Abdellatif Jouahri, Governor of Morocco’s central bank, recently confirmed the drafting of legislation to establish a comprehensive regulatory framework for cryptocurrency. The move signals Morocco's intent to balance the need for innovation with mitigating potential risks to its financial system.

From Blanket Ban to Regulatory Embrace

In 2017, Morocco imposed a ban on Bitcoin and other cryptocurrencies, citing systemic risks such as fraud, volatility, and potential misuse for illicit activities. Despite this, the ban failed to deter interest in digital assets, with nearly 5% of Moroccans actively engaging in crypto transactions by late 2023.

The grassroots adoption of cryptocurrency in Morocco highlights the growing demand for decentralized financial solutions, even in jurisdictions with prohibitive policies. This organic growth appears to have influenced policymakers to rethink their approach and consider formalizing the sector under legal and regulatory frameworks.

Draft Legislation Underway

Governor Jouahri announced that the Bank Al-Maghrib, Morocco’s central bank, has completed drafting cryptocurrency legislation, signaling progress toward legitimizing digital currencies. Although no official timeline has been provided for enacting these laws, the central bank has emphasized the importance of aligning domestic regulations with international standards.

The proposed legislation aims to provide clarity for investors, businesses, and individuals engaging in the crypto space while addressing risks such as market manipulation, consumer protection, and anti-money laundering.

Exploring a Central Bank Digital Currency (CBDC)

In addition to regulatory reforms for cryptocurrencies, Morocco is exploring the feasibility of a central bank digital currency (CBDC). Speaking at a conference in Rabat, Jouahri noted that authorities are assessing how a CBDC could align with public policy objectives, such as financial inclusion and enhanced payment systems.

While no concrete decisions have been made regarding a Moroccan CBDC, the announcement underscores the nation’s broader commitment to leveraging blockchain technology to modernize its financial infrastructure.

A Global Shift Toward Crypto Regulation

Morocco’s regulatory pivot mirrors a broader global trend, where nations initially skeptical of cryptocurrencies are now embracing the technology to optimize their financial systems.

• Hong Kong has emerged as a global leader in crypto innovation after rolling out its regulatory framework earlier in 2024.
• The United Kingdom plans to introduce its digital asset regulations by 2025, signaling its intent to create a robust ecosystem for virtual currencies.
• The United States is also advancing crypto and stablecoin legislation. Under the Trump administration, proposals such as Senator Cynthia Lummis’ Bitcoin reserve bill gained traction, reflecting a growing bipartisan interest in crypto policymaking.

Meanwhile, private sector initiatives like those by Tether and Circle have revolutionized international settlements, demonstrating the tangible benefits of blockchain technology in facilitating cross-border trade.

The Road Ahead for Morocco

As Morocco inches closer to crypto legalization, the nation stands at a crossroads. On one hand, embracing cryptocurrency could unlock opportunities for financial innovation, attract foreign investment, and enhance the nation’s digital economy. On the other hand, regulators must address challenges such as volatility, consumer protection, and integrating crypto into the existing financial framework.

With nearly 5% of its population already active in the crypto space, Morocco’s upcoming regulations are poised to shape the nation’s financial landscape for years to come. Whether through crypto-friendly policies or the launch of a CBDC, Morocco’s evolving stance on digital assets reflects a broader acknowledgment of the transformative potential of blockchain technology.

As more nations revise their crypto policies, Morocco’s journey from prohibition to regulation underscores the global shift toward fostering innovation while managing risks in the rapidly evolving digital asset market.