“Al-Maghrib Bank” reaches advanced stages before deciding to issue a digital currency

Bank Al-Maghrib is at a crossroads in the development of the crypto asset market around the world; It treats the issue with caution, and monitors the interaction of other central banks to arrive at a position that takes into account all the challenges presented.

In the context of a prospective approach, Bank Al-Maghrib established, in 2021, a committee in charge of studying the feasibility of issuing a digital currency for the Central Bank, the issuance modalities and its repercussions. As a result, the Central Bank launched extensive consultation processes and formed sub-working groups to hold meetings with international organizations in order to better understand this problem.

In this sense, Bank Al-Maghrib is studying the challenges related to the issuance of a digital currency in a massive way, directed to financial intermediaries, and in another stage directed to the public, after studying the goals that it can achieve, the associated risks with and its impact on the financial system in general.

Morocco’s step in this direction has become advanced, as a draft law on cryptocurrencies is currently being finalized, which will allow exchange platforms to obtain licenses to operate in Morocco under the supervision and supervision of Bank Al-Maghrib.

Bank Al-Maghrib invoked the importance of this topic in the annual report for the year 2021 presented to King Mohammed VI last week, in which he indicated that the past year was characterized by a great acceleration in the development and exchange of crypto assets, as its value almost quadrupled between the end of 2020 and the end of 2021 to reach what is almost three thousand trillion dollars.

This development prompted central banks around the world to change their stance on cryptocurrencies as although most of them were initially opposed to these assets, the current trend is moving towards issuance thinking of issuing a digital currency to follow. the rhythm of the wave

According to data from the Bank for International Settlements, which conducts an annual survey on this topic, 90 percent of the central banks consulted in the 2021 version announced that they have projects in advanced stages to study the feasibility of creating a digital currency. for central banks.

The percentage of central banks interested in crypto assets did not exceed 65 percent in 2017, before rising to 86 percent in 2020, after the Central Bank of Uruguay in 2014 was the only one to start thinking about this issue.

Awareness of the repercussions of this currency on cross-border performance has contributed to strengthening cooperation between central banks to define common policy axes to manage these new future currencies, and the International Monetary Fund is paying more attention to this.

Many central banks are now at an advanced stage in this regard, as they are field-testing a digital retail central bank operation for the public.

In this regard, the Central Bank of China launched its digital currency, e-CNY, in beta regions. The Riksbank has also reached the proof of concept stage for its digital currency, E-Krona; The Central Bank of the Bahamas launched its Sand Dollar in October 2020. Late last year, the Central Bank of Nigeria launched its eNaira.

In its interest in this topic, Bank Al-Maghrib evokes the possibilities offered by cryptocurrencies in terms of innovation, financial inclusion, reduction of costs and transaction times, not to mention the improvement of the decision-making process in the field of politics. currency, reducing the cost, reducing the impact of credit currency on the environment and contributing to the fight against the financing of terrorism and money laundering.

On the other hand, the US Federal Reserve, the most prominent central bank in the world, continues to think about the feasibility and benefit of creating a digital currency in terms of improving the performance of the system, especially since the United States of America consider their system to be effective and safe.

The questions from the US Federal Reserve reflect the warning of some central banks about the repercussions of this currency, especially on financial stability, the protection of personal data or even the fight against the financing of illegal activities, which in part remain cause for doubt.

The European Central Bank has also remained cautious; However, in July of last year, it began a research phase of a project to create a digital euro that will last two years. The same bank stated that this project does not imply the possibility of making any decision in the future about the possibility of issuing this currency; Which embodies great caution.