Crypto Adoption in Africa: Notable Progress in the Maghreb

What is the state of crypto adoption in the Maghreb? It’s not an insignificant question, especially as the region is far from being the continent’s crypto powerhouse. Sub-Saharan Africa is leading the way, driven in particular by Nigeria. Figures show that in this West African country, more and more people are holding cryptos or are aware of their existence. In fact, several Maghreb countries are not far behind in this dynamic, even if the relative weakness of this craze must be acknowledged. In what follows, we look at the trends in crypto adoption in the Maghreb and the reasons behind them.

Crypto adoption in the Maghreb: the countries that stand out the most

A few months ago, in July 2023 to be precise, data concerning the African countries most interested in crypto filtered through. They reveal a restrictive list of 15 states recording the greatest African craze for digital assets. The list includes 4 of the 5 countries that make up North Africa.

These are, in order, Morocco, with an adoption rate of 5.43%. The country is followed by Egypt, where interest in crypto is estimated at 2.74%. Next comes Algeria, whose appetite for crypto stands at a modest 0.82%. Tunisia closes with an even lower adoption rate of 0.60%. All in all, North Africa registers an adoption rate of around 10.0% compared with the rest of the continent.

This data is somewhat corroborated by a report from Chainalysis, published during October 2023. The study, which covers the Middle East in addition to North Africa, shows the weight of the Maghreb countries, Libya included, in the MENA region. In terms of crypto value, the latter represents 7.2% of the rest of the world.

It’s true that crypto adoption in the Maghreb is typically low. Particularly when compared to the 74.7% adoption rate that characterizes a region like West Africa. Yet this result is no less significant, especially for Morocco, which boasts the highest crypto penetration rate in the region. A focus on this country is useful in explaining this dynamic.

Focus on crypto adoption in Morocco

The main reason for focusing on Morocco is the country’s crypto situation. As a reminder, cryptos are banned in Morocco. Yet the country remains in the Top 20 for global crypto adoption.

As Chainalysis reports, Morocco has only maintained its place in this top 20 of countries adopting cryptos the most. The kingdom, explains the blockchain analytics company, has also emerged as a leading country for digital asset ownership in the region.

Although this represents a drop from its previous ranking (14th), it’s still a commendable feat given the challenging conditions of the Moroccan crypto market. It’s all the more remarkable given that Morocco is the second MENA country, after Turkey (12th) and ahead of Iran (28th), to make the top 30.

Morocco also boasts the highest crypto transaction value in the Maghreb region, which includes Algeria, Egypt, Libya, Morocco and Tunisia. This contrasts with the figures for Egypt, which has disappeared from the Top 30.

What’s more, the Moroccan crypto industry is particularly resilient. Indeed, Morocco ranks 13th in the world in terms of bitcoin usage. Amazingly, around 4.9% of the Moroccan population owned some form of crypto in 2022, despite the ban on these assets in force since 2017. A situation that could be reversed, according to Morocco’s central bank. The latter having moreover announced that efforts were being made to adopt regulations on cryptos, which have yet to see the light of day.

The situation in other Maghreb countries

It has to be said that, despite everything, the situation remains very positive in Morocco. According to observers, the country is moving towards crypto regulation. This asset class remains strictly prohibited in Libya, Tunisia, Egypt and Algeria. Worse still, no regulation is planned in these countries in the immediate future.

However, it remains to be seen whether the crypto-friendly regulatory environment in the United Arab Emirates will influence the regulatory landscape in other African countries in the region. This cannot be ruled out, given the similarity of laws and regulations in this geographical area.

In this region, Saudi Arabia is leading the way. The country topped the rankings of crypto economies recording 12% year-on-year growth in crypto transaction volume. Chainalysis attributed this growth to the growing interest of retail investors in diversifying their portfolios and investing in digital assets.

Conclusion

Ultimately, crypto adoption in the Maghreb shows notable progress, despite significant challenges. Among the region’s countries, Morocco stands out with the highest adoption rate, despite the ban on these digital assets. The Chainalysis report demonstrates the resilience of the Moroccan crypto industry, with the country now ranked among the top 30 most crypto-adopting countries globally. However, other Maghreb countries, such as Algeria, Tunisia, Egypt and Libya, maintain a strict approach banning cryptos, with no immediate prospect of regulation. The contrasting situation between these countries highlights the variations in crypto adoption within the region. It is worth noting that the Central Bank of Morocco is considering the adoption of crypto regulations, which could potentially influence other Maghreb countries to reconsider their position. The influence of neighboring countries, such as the United Arab Emirates and Saudi Arabia, in the regional crypto ecosystem is also something to keep an eye on. Overall, current figures show that the adoption of cryptos in the Maghreb is constantly evolving, paving the way for promising prospects, even if regulatory challenges remain.