Cryptocurrencies are banned in Morocco, but peer-to-peer bitcoin trading platform LocalBitcoins is reporting all-time trading highs this year.
February 2021 was the platform’s “best month ever” in Morocco in terms of trading volumes, according to LocalBitcoins Chief Marketing Officer Jukka Blomberg, who said approximately $900,000 worth of bitcoin was traded on the platform through the month. LocalBitcoins also saw a 30% increase in user registrations between 2019 and 2020, with over 700 new accounts created, Blomberg said.
Bitcoin purchases are rising despite a ban on cryptocurrencies in the North African country. In November 2017, Morocco’s Foreign Exchange Office informed the general public that virtual currency transactions were an infringement on foreign exchange regulations and subject to sanctions and fines. Financial regulators continue to view cryptocurrencies with skepticism, even as the country’s central bank investigates the benefits of a government-issued national digital currency (CBDC).
Despite the ban, trading on peer-to-peer platforms like LocalBitcoins rose steadily through the years. From November 2017 to February 2021, trading volumes on the platform saw a steep 215% increase.
“Some traders just want the quick gain from cryptocurrencies. Some of them want financial freedom because they don’t use banks,” Nori, who is based in Casablanca, told CoinDesk.
Unbanked
Morocco is one of the most underbanked countries in the world. World Bank research from 2019 indicates only 29% of Moroccan adults have access to bank accounts, which is considerably lower than the Middle East and North Africa (MENA) regional average of 44%.
“I think that it's just employed people who use the banks. If they are unemployed or self-employed, they just want to stock their money at their home. They just don’t use the bank,” Nori said.
In a 2015 article that appeared in the Guardian, a Moroccan banking official Ismail Douiri described the reaction of low-income earners to a low-cost financial services program that was created with them in mind. Most were intimidated by the banks, and as well as by fees.
“These were all concerns we could have foreseen. What we didn’t expect was for our prospective new customers to say what they valued most was privacy and confidentiality,” Douiri wrote.
Douiri went on to explain how households did not want their neighbors to know they had a bank account because they may try to borrow money.
Nori said the freedom and confidentiality inherent in cryptocurrencies could be feeding local curiosity in bitcoin.
Signs of Change
According to Nori, Moroccans couldn't buy bitcoin or other cryptocurrencies through digital asset exchanges using their credit cards. If they wanted crypto, they had to buy it in Europe or the U.S., Nori said.
Although Moroccans were not allowed to directly purchase cryptocurrencies using their bank accounts, peer-to-peer lending facilitated cash for crypto trading. Payment options on LocalBitcoins indicate the use of cash deposits and transfers to make bitcoin trades made via social media platforms like WhatsApp and Telegram.
But in April 2020, global cryptocurrency exchange Binance added support for purchasing crypto with Moroccan dirham. Moroccans can buy crypto from certain exchanges using international credit cards, although they are not allowed to convert their purchases back into dirham, according to Nori.
“So that's a big step,” Nori said, adding that she believes being able to buy crypto on traditional exchanges from Morocco is a sign local regulators could make cryptocurrencies legal in the future.
“Overall, it seems like bitcoin’s positive trend and growing demand is untouched in Morocco. And looking towards 2021 and beyond there are numerous reasons to be very optimistic about the growth potential,” Blomberg added.