Moroccans are investing heavily in Bitcoin despite the government banning cryptocurrency trading three years ago.
Peer-to-peer (P2P) trading platforms are seeing record volumes of Bitcoin purchases in Morocco, even though the government outlawed cryptocurrency trading activities across the country.
In November 2017, Morocco’s foreign exchange authority informed citizens that cryptocurrency transactions violated exchange regulations. As a result, such transactions became subject to fines and penalties. This decision made buying and selling Bitcoin and many other cryptocurrencies more difficult for Moroccans.
Nevertheless, many residents have turned to P2P trading platforms like LocalBitcoins. The platform is currently reporting record trading activity in the North African country as Bitcoin and other cryptocurrencies continue their rally.
Jukka Blomberg, LocalBitcoins’ head of marketing, said the platform experienced its strongest month in February. According to Blomberg, about $900,000 worth of Bitcoin was traded on LocalBitcoins in Morocco last month. The P2P platform also recorded a 30% increase in user registrations between 2019 and 2020, adding roughly 700 new accounts during that period.
From the November 2017 ban through February 2021, trading volumes on LocalBitcoins in Morocco have risen by more than 215%. The current rally, which began last year across the global crypto market, has increased demand for Bitcoin and other cryptocurrencies worldwide. More people have begun viewing Bitcoin as an investment and an inflation hedge, driving interest in exposure to the leading cryptocurrency.
Insaf Nori, Middle East community lead at cryptocurrency firm Decred, said Moroccans are being drawn to cryptocurrencies out of curiosity and a desire for financial autonomy.
The situation mirrors developments in Nigeria, Africa’s largest economy. The Central Bank of Nigeria (CBN) banned banks from providing financial services to cryptocurrency businesses, making it harder for Nigerians to buy and sell cryptocurrencies.
Despite the restrictions, Nigerians have migrated to P2P platforms such as Paxful, LocalBitcoins and even Binance. Prior to the CBN’s decision, Nigeria was the world’s second-largest Bitcoin market after the United States. Nigerians continue to seek ways to access cryptocurrencies as rising inflation and the naira’s ongoing devaluation strain household finances.