The kingdom is said to have over $200,000 in virtual currency transactions per day. Rabat wants to end circumvention of its financial legislation.
The arrival of virtual currencies is not seen by financial authorities as a promising innovation in a country where foreign exchange transactions are tightly controlled. On Monday, November 20, Morocco’s National Exchange Agency announced a ban on the trading of virtual currencies, of which Bitcoin is the most symbolic. The Moroccan gendarmerie in particular justified his decision through the volatility of these deemed illegal cryptocurrency processes.
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In the absence of a regulatory framework for e-money, several Moroccan companies have started accepting bitcoin for their services, despite the kingdom’s very strict exchange rate regime. Moroccan authorities sounded the whistle a week after a digital services firm MTDS notified its clients that it was accepting bitcoin payments. The announcement caused a stir in the local media, forcing authorities to formally condemn the practice.
“Transactions through virtual currencies violate the provisions of the current text that are subject to penalties and fines,” the Moroccan office ruled in a press release, noting that “certain natural and legal persons are conducting financial transactions.” The foreign exchange agency described virtual currencies as “hidden payment systems” and recalled that “all financial transactions with foreign countries must be conducted through authorities-approved intermediaries and foreign currencies listed by the bank Al-Maghrib [Central Bank of Morocco].” .
The following day, the monetary authorities also reacted in a press release jointly issued by the Ministry of Economy and Finance, the Bank of the Maghreb and the Moroccan Capital Market Authority (AMMC), warning of “certain recent articles published in the national media”. “These announcements may confuse the public mind into believing that this virtual currency is endorsed by monetary authorities,” we can read in the press release. Authorities also warned about the risks associated with bitcoin, which can be used for “illegal or criminal purposes, including money laundering and the financing of terrorism.”
Virtual currencies, most notably Bitcoin created in 2009 — supposedly by computer scientist Satoshi Nakamoto — were designed as an alternative to currencies regulated by central banks and traditional markets. Without a physical presence, virtual currency does not depend on the signature of a state or institution, and derives its value from the inviolability of the blockchain, the computer protocol that created it. Bitcoin, which traded below $1,000 on January 1, 2017, hit an all-time high of $8,300 on Monday.
Moroccans living in the kingdom do not have the right to open an account abroad and must obtain authorization to take foreign currency out of the country: the annual tourist donation limit is 40,000 dirhams (about 3,600 euros). You need a special credit card (up to AED 10,000 per year) to shop online.
As a result, many Moroccans turn to cryptocurrencies and their anonymity systems to escape the vigilance of the authorities. “Here, bitcoin is increasingly being used for trading or investing,” said a Moroccan trader who did not want to be named. But we are not the only ones. Many people use it for business activities or online payments. Buying Bitcoin in Morocco is not difficult if you have little knowledge. »
Although it is difficult to assess the trading volume of these exchanges, Morocco will see more than $200,000 in virtual currency transactions per day, or 62 million euros per year, according to local media estimates. In comparison, Morocco’s total transaction value in 2016 was 2.1 billion euros.
Since the 1970s, the kingdom has adopted a fixed system linked to a basket of currencies (40% USD, 60% EUR), allowing the dirham to be listed. The foreign exchange bureau is fully interested in banning transactions in cryptocurrencies due to a weak currency and insufficient foreign reserves. It remains to be seen whether the Moroccan government will be able to enforce the measure on a computer circuit, which remains inviolable to this day. As for the announced dirham flexibility reform, it has been postponed indefinitely.