According to a news release from Moroccan media, the North African state’s apex bank is exploring the idea of a state-sanctioned digital currency.
BAM Not Ruling Out CBDCs for the State
The announcement, which was made over the weekend, confirmed that Bank Al-Maghrib (BAM), the Kingdom of Morocco’s central bank, has set up a committee comprising industry experts to investigate the potential upside of sanctioning central bank digital currencies (CBDCs).
Following the economic downturn caused by the covid-induced lockdowns, many world economies are still trying to find their feet.
Consumers were forced to rely on digital channels to pay for necessities, and the rise in demand for digital assets like Bitcoin, saw a new financial ecosystem emerging.
The fact that anyone could own digital assets was appealing, and the absence of any central authority saw the nascent industry explode.
Global regulators have been trying to manage crypto’s rise with regulations, but it continues to grow. To prevent fiat currencies from losing their relevance, many central banks are exploring the idea of a digital version of their fiat currency.
The Moroccan apex bank was quick to point out the research made available by the Bank for International Settlements (BIS) concerning CBDCs.
The BIS discovered that over 20% of central banks are ramping up operations to issue state-sanctioned digital currencies in the next three years, with China leading the charge with their Digital Currency Electronic Payment (DCEP) project.
Although 60% do not intend to make a digital format for their fiat currencies, 86% consider the idea.
The committee will set out to identify and analyze the contributions, benefits, and risks of a CBDC in the Moroccan economy. The committee will also look into any likely repercussions CBDCs may have on the country’s monetary policy, the structure of banking intermediation, financial stability, and the legal framework.
The committee will be working closely with other government regulatory bodies in the country on measures to monitor crypto use within and outside the nation. However, BAM has not committed to a time-frame for a digital copy of its dirham.
Africa Coming Along The Crypto Ride
A teeming body of African youths has enthusiastically embraced crypto since it reached the shores of the ancient continent. In a recent report posted online, Africa seems to be a hotbed for crypto, with South Africa becoming a crypto hub in a very short period.
Other African nations like Nigeria, Kenya, Ghana, and Uganda have seen peer-to-peer crypto services explode, with Localbitcoins and Paxful having a major stake in the budding industry.
While Morocco has not found itself among crypto top dogs in Africa, the North-facing nation has also made some moves in the digital assets space. As per reports from Ars Technica, a US private equity firm Soluna is planning to build a 36 megawatt Bitcoin mining farm in Morocco.
The initiative, which is a means to an end, will see the New York-based company mining BTC and selling back 20% of its energy output to the Moroccan government. The initiative, which is part of a power purchasing agreement (PPA), will see the mining company move electricity from isolated areas to more populated communities through its wind energy project.
The Moroccan government had previously outlawed crypto payments in the country, but with energy becoming a major problem for a growing Moroccan population, the government is looking to reverse its decision to solve this challenge.
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