Bitcoin trade in Africa is on a historic high. Currently, bitcoin trading on peer-to-peer platforms as a whole has even surpassed the peak of the 2017 bull run, according to data from analytics site Useful Tulips. In Morocco, Abdellatif Jouahri, Wali of Bank Al-Maghrib (BAM), announced that Morocco is studying a bill to regulate the use of cryptocurrencies.
In the year 2021 Ghana, Kenya and the Central African region reached new all-time highs in Bitcoin P2P trading, while Nigeria also came very close to breaking its previous record. The renewed interest is due to two factors: the current state of developing economies and the expectations derived from Bitcoin’s upcoming halving.
Nigeria is the queen of regional bitcoin trading, with around $7.2 million traded last week. Next come Kenya and South Africa with USD 1.6 million and USD 1.1 million respectively, which have been modified.
Other countries in the region moved less than $1 million in BTC in the same year, but still showed a significant increase in interest in the cryptocurrency.
According to the World Bank, sub-Saharan Africa is on the brink of its first recession in 25 years, dropping from 2.4% economic growth in 2019 to -5.1% in 2020.
“Real GDP growth is expected to decline sharply, particularly in the three largest economies in the region – Nigeria, Angola and South Africa – due to continued weak growth and continued weak GDP growth. investment,” the World Bank said.
The situation in Africa is very similar to that experienced by several Latin American economies. For some time, runaway inflation and national currency devaluations have led some traders to turn to Bitcoin to store and transfer value, as they struggle to invest in other commodities or even buy dollars.
Latin America and Africa could prove to be a testing ground for Bitcoin’s status as a store of value in times of economic hardship.
Bitcoin transactions still not allowed in Morocco
Moroccan authorities have long informed that cryptocurrencies are not allowed as a means of payment in the kingdom. The latest recall came days after financial services provider MTDS announced that it would accept Bitcoin in the future. Immediately afterwards, the Moroccan authorities had to intervene. In a press release, the two Moroccan institutions in charge of the issue of monitoring electronic money informed that Bitcoins are unauthorized means of payment. These currencies are not subject to government supervision and value controls. Using it as a means of payment is therefore illegal in Morocco and subject to penalties. Penalties and fines may be imposed on all transactions, both domestic and international, where payment is made in currencies not listed by Bank Al Maghrib or the Foreign Exchange Office.
In 2021, 2.4% of Moroccans were in possession of cryptocurrencies, according to a study by crypto payments company Triple A, which ranks Morocco as the 24th largest user of cryptocurrency in the world.
The kingdom’s institutions dissociate themselves from this practice and have declared that cryptocurrencies operate in a “hidden payment system which is not supported by any financial institution”. They also pointed out that “the use of cryptocurrencies poses significant risks to its users, as cryptocurrencies are associated with illegal activities on the web, including the buying and selling of drugs, weapons and ransoms.
Bank Al-Maghrib is working on a bill for the legal use of cryptocurrencies
Abdellatif Jouahri, the Wali of Bank Al-Maghrib (BAM), announced in June that a bill to regulate the use of cryptocurrencies is planned.
During a press briefing after the second quarterly meeting of BAM’s board of directors in 2022, the Wali of Bank Al-Maghrib explained that a committee is working to create an appropriate regulatory framework which aims to combine innovation, technology and consumer protection.
In this regard, Jouahri underlined that several aspects are taken into account during the drafting of the law, in particular the world experience in the matter. He pointed out that benchmarking is currently underway with the International Monetary Fund (IMF) and the World Bank in order to make the necessary adjustments in this regard.
He also pointed out that this legal framework will also allow the updating of anti-money laundering and anti-terrorist financing laws.
As is known, BAM, the Ministry of Economy and Finance and the Moroccan Capital Markets Authority (AMMC) have alerted the public to the risks associated with the use of virtual currencies, the most important of which are the lack of consumer protection, the volatility of the exchange rate of these virtual currencies compared to a currency having legal tender, as well as the use of these currencies for illegal or criminal purposes, in particular money laundering and the financing of terrorism .