Morocco central bank exploring digital currency but Bitcoin still banned

Getting your Trinity Audio player ready...

The central bank of Morocco has reportedly set up a committee to explore the merits and the risks of a digital dirham. The exploratory committee will also study Bitcoin and other digital currencies which are still banned by the Moroccan government.

Bank Al-Maghrib (BAM) seems to be gradually changing its stance on digital currencies, local outlet Morocco World News reports. It has charged the new committee with identifying and analyzing the advantages and drawbacks of a digital dirham for the Moroccan economy. BAM further confirmed the committee’s existence to Ledger Insights, clarifying that it was still at a very early stage.

In its statement to the news outlet, BAM stated, “The committee will identify and analyze the contributions, the benefits as well as the risks of a CBDC for the national economy. In addition, this committee will thoroughly review all consequences of a CBDC on monetary policy, the structure of banking intermediation, financial stability and legal framework.”

The Committee will collaborate with various other local authorities in its study. Together, they will plan on how the digital dirham will be used, both at a local and international level. However, Moroccans should not be expecting the CBDC any time soon. The bank justified its cautious approach by citing a study by the Bank for International Settlements which claimed most central banks won’t issue a CBDC in the next six years.

It stated, “In the current context, and taking into account the various reforms undertaken by Bank Al-Maghrib for the promotion of electronic means of payment and the reduction of cash and whose benefits can only be assessed in the medium term, it would be premature to consider the issuance of a digital currency in the short term.”

While Moroccans will welcome the digital dirham, they are still prohibited from owning or trading Bitcoin. Back in November 2017, the Ministry of Finance banned all digital currencies in the North African country.

In its statement at the time, the Ministry, through the Office des Changes told the public that trading digital currencies constituted an infringement of the exchange regulations. This made it liable to fines and penalties. The statement also claimed that the decision was necessary as digital currencies are “secretive payment systems” and “involve significant risk for users.”

However, as per local reports, this ban has done little to kill off the digital currency industry in Morocco. The country, which is Africa’s fifth-largest economy, has continued to rank among the top digital currency hubs in the continent. It reportedly only trails Nigeria, South Africa and Kenya in trading volume.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

See also: CoinGeek Live panel, The Future of Banking, Financial Products & Blockchain