Morocco is set to become the first developing country with clear crypto regulations. It will also balance security, innovation, and financial growth.
The Governor of Bank Al-Maghrib (BAM), Abdellatif Jouahri, recently shared that Morocco is close to adopting a legal framework for regulating crypto-assets. It seeks to first manage the use of crypto-assets and also encourage financial innovation.
According to Jouahri, the framework was designed in line with G20 recommendations. At the same time, it would also mitigate the financial risks associated with crypto-assets. However, the governor stressed that the aim is to regulate crypto assets rather than close off opportunities for innovation.
Morocco Poised to Lead in Crypto Regulations for Developing Nations
The framework was developed in consultation with technical experts from the International Monetary Fund (IMF) and the World Bank, working closely with BAM. The aim was to balance two key priorities: facilitating a secure, well-regulated environment and enabling innovation. The drafting, Jouahri said, involved consultations with national and international institutions, in addition to economic stakeholders. As such a broad approach, it was hoped that such an approach would encourage the successful adoption of the framework and would minimize uncertainties.
If adopted, this legal framework would place Morocco as one of the first developing countries to clarify crypto assets. The country is getting ready for the financial and economic dangers of monetary systems turning digital. However, Jouahri also mentioned Morocco’s growing secondary market for non-performing loans. The market possesses a great potential for growth after the securitization of an operation of a Moroccan bank.
The finalized framework is expected to boost banks’ solvency. In addition, it will allow for active management of non-performing loans. This may balance the financial institution’s balance sheets and improve its performance.
However, this adoption of crypto assets comes with higher risks, including criminal activity associated with cryptocurrency. Moroccan authorities had earlier this month arrested five related to a crypto fraud scheme. The arrests in Salé were on the basis of a complaint passed on by international law enforcement channels.
Finally, Morocco advances in creating a regulatory framework for crypto assets. It has positioned itself to be crypto regulation’s leader in the developing world while also addressing the evolving risks.
