Morocco bans the use of cryptocurrencies as a payment method

The north-west African Kingdom of Morocco has officially banned all virtual transactions, labeling them as “significant risks for their users”.

The document, released by country’s foreign exchange regulators clearly states, “transactions via virtual currencies constitute a breach of regulations, punishable by penalties and fines.” The announcement was made by Morocco’s Office des Changes.

Financial regulators believe that the use of digital currencies is dangerous as they lack regulation and are not backed by any state or central bank. Keeping this in view, the government has declared that all payments going abroad must go through approval by Bank Al-Maghrib, Morocco’s central bank.

The press release further indicates that virtual transactions within the country are liable to penalties as they constitute an "infringement of the exchange regulations". "This is a hidden payment system that is not backed by an organization, the use of virtual currencies entails significant risks for their users," public has been warned. The Moroccan government, the central bank, and the Professional Group of Banks of Morocco are all examining the development of cryptocurrencies in the country.

The news comes just a week after Morocco Trade and Development Services MTDS started accepting Bitcoin Payments. The digital service provider has stated that they would comply with the government’s decision. The company’s head, however, believes that keeping people from using digital currencies would not be an easy task for the regulators.

It is important to note that Morocco is not the first country to take such a firm stance on the use of virtual currencies. Cryptocurrencies and Initial Coin Offerings (ICOs) have had mixed reactions from financial regulators all over the world and there are some who have welcomed their use as an advanced form of payment in financial sector.

A few, on the other hand, have issued a complete ban on their trade, including China, South Korea, and Vietnam. Despite the ban, these countries still have cryptocurrency miners and traders that operate by finding loopholes in the government’s regulation. According to an estimate, over $200,000 worth of virtual payments pass through Morocco on a daily basis. It’ll be interesting to see how the country manages to verify such a big number.

Even though they are regarded as illegal assets by many states, digital currencies like Bitcoin continue to rise at impressive rates. This ban, similar to China’s cryptocurrency crackdown, is unlikely to significantly affect their booming values.