Morocco has proposed a new draft law to create a comprehensive regulatory framework for digital assets in the North African country. The law focuses on giving digital assets legal legitimacy, protecting investors, curbing ‘crypto’ crime and promoting innovations such as tokenization and stablecoins.
In Nigeria, policymakers, legislators, and digital asset industry leaders have united in a call for balanced regulations that don’t stifle innovation, amid a shift in the government’s lax approach to policing of the burgeoning sector.
Morocco: From banning to regulating digital assets
The new draft law was proposed by the Ministry of Economy and Finance, with the central bank and capital markets watchdog, known locally as Bank Al-Maghrib and Autorité Marocaine du Marché des Capitaux (AMMC), respectively, also widely involved in its drafting.
Morocco remains one of the few countries globally that has an ongoing blanket ban on digital assets. In 2017, the central bank and other financial regulators issued a joint statement prohibiting digital asset transactions, which they said would be subject to penalties.
However, despite the ban, digital assets have flourished in the country. One study earlier this year found that the ban did little to dissuade Moroccans from diving into digital assets, and instead, it pushed them into unregulated and risky underground platforms. The country has also ranked in the top 20 for grassroots adoption in recent years.
With the ban proving ineffective, the Kingdom of Morocco has now opted to regulate the sector.
The proposed framework has established clear rules for the sector, defining digital assets as “any digital representation of value or rights that can be transferred or stored electronically using distributed ledger technology (blockchain), and that can be issued, offered to the public, traded, or managed through licensed service providers.”
It further establishes a licensing regime, with the AMCC and the central bank selected as the market watchdogs. AMCC will oversee most of the industry factions, including digital asset issuance and trading. The top bank will mainly police stablecoin issuance.
Licensed virtual asset service providers (VASPs) must adhere to transparency and disclosure requirements to protect customers’ assets and data. They must also integrate Know Your Customer (KYC), anti-money laundering (AML), and asset tracing programs that comply with standards established by the Financial Action Task Force (FATF).
Other requirements center around preserving financial stability and preventing market abuse.
The framework pledges to support innovation in the digital asset sector. This includes promoting the issuance of utility tokens by local entities, supporting the integration of stablecoins in payments, and making it easy for new VASPs to set up operations.
“The objective is to build a clear and flexible legal and regulatory framework to support the rise of crypto-assets while protecting the financial system and users against the related risks,” a translated version of the draft says.
The draft is strictly focused on digital assets and excludes several related activities such as block reward mining, non-fungible tokens (NFTs), central bank digital currencies (CBDCs), and decentralized finance (DeFi).
Nigerians call for balanced regulations
In Nigeria, the digital asset industry has joined hands with legislators and policymakers to lobby for balanced regulations that promote innovation while safeguarding investors.
Industry stakeholders recently met with an ad-hoc committee of the House of Representatives on digital assets to give their input on a proposed national regulatory framework.
The Stakeholders in Blockchain Technology Association of Nigeria (SiBAN) called for a risk-based framework that separates high-level operators, such as trading platforms and custodians, from lower-level startups offering supporting technology and infrastructure.
SiBAN also wants the new framework to unify the overlapping mandates from the central bank, securities watchdog, and other agencies. This overlap comes at a steep cost for startups and requires large compliance teams, eventually pushing out local operators and favoring well-funded offshore platforms.
Other stakeholders called on the government to expand access to its regulatory incubation program, especially for local startups. Some said that a Nigeria-first licensing approach that prioritizes applications from local companies would prevent brain drain and protect Nigerian innovators from outsized competition.
Legislators supported calls for more balanced regulations. Olufemi Bamisile, who chairs the ad-hoc committee, wants the SEC’s minimum capital requirement of ₦1 billion ($700,000) reduced as it’s unrealistic for most local VASPs.
This requirement is higher than in more advanced economies; in Dubai, the figure stands at $408,000, while in most European Union jurisdictions governed by Markets in Crypto-Assets (MiCA), it stands at a maximum of $175,000.
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Source: https://coingeek.com/morocco-debuts-draft-law-nigeria-pushes-for-balanced-rules/