Where Does the Moroccan Digital Dirham Project Stand and What Is Its Importance?

SadaNews - Bank Al-Maghrib (the central bank) continues to study the issuance of a central digital currency aimed at simplifying payment processes between individuals and accelerating cross-border financial transfers.

Bank Governor Abdellatif Jouahri clarified during a conference held in Rabat on July 21, 2025, that the Kingdom is moving forward in this direction in parallel with close international cooperation involving the World Bank, the International Monetary Fund, and the Central Bank of Egypt, in order to assess the economic and regulatory impacts associated with this digital currency.

Jouahri noted that a draft law regarding digital assets is currently under review at the Ministry of Finance, reflecting Morocco's keen interest in establishing a solid legal framework to regulate this rapidly evolving field.

The initiative is gaining increasing importance in light of the local economy's reliance on remittances from Moroccans living abroad and the growing volume of cross-border trade, which suffers from slow procedures and high costs when relying on traditional systems.

Remittances to Morocco account for nearly 8% of the Gross Domestic Product in 2024, totaling 117.7 billion dirhams ($12 billion).

It is important to distinguish between the central digital currency supervised by the central bank and decentralized cryptocurrencies, which Morocco has prohibited since 2017 despite the occurrence of informal trading among some individuals through means of circumventing imposed restrictions.

A Shift in the Moroccan Banking System

The Moroccan banking system is witnessing a rapid shift toward digitization, driven by clear ambitions to enhance digital sovereignty and strengthen financial and technical independence.

Digital economy researcher Jamal Al-Amin confirms that this transformation is reflected in the development of mobile payment services and open banking. However, international financial transfers still heavily rely on the SWIFT network and the traditional correspondent banking system.

Al-Amin adds in a statement to Al Jazeera that Morocco seeks to expand its economic partnerships with Africa and establish its digital sovereignty, but it currently lacks sufficient strategic partnerships in the field of bilateral digital regulation, asserting that achieving this goal requires a strong political vision and effective regional cooperation.

In this context, economic intelligence and supply chain management expert Osama Al-Wasini considers that adopting the "digital dirham" will bring about a qualitative shift in Morocco's financial performance.

Al-Wasini explains to Al Jazeera that the central bank's digital currency will contribute to improving the speed and security of cross-border financial transfers, allowing transactions to be executed nearly instantaneously, utilizing the latest encryption technologies to protect financial data from manipulation and breaches.

It also provides complete transparency in tracking transactions, reducing risks of fraud and money laundering.

International Partnership

The digital dirham opens new horizons for direct settlements with regional partners, positioning Morocco more flexibly within global value chains.

Al-Wasini believes that reducing reliance on foreign currencies such as the dollar and euro will lessen exchange rate fluctuations that negatively impact the trade balance and national economy. This trend enhances monetary sovereignty, granting authorities greater control over financial policy.

He adds that the adoption of the digital dirham could allow Morocco to establish direct financial settlements with regional and international trading partners using alternative currencies, contributing to lower transfer costs and increasing the country's integration into global value chains.

For his part, Jamal Al-Amin emphasizes that cooperation with foreign central banks to create direct settlement channels is a crucial step; however, he conditions this within a strict legal framework that preserves monetary sovereignty and limits speculation.

He proposes establishing precise controls for the stability of the digital dirham in external transactions, while maintaining a monitored exchange system linked to a basket of currencies with specified volatility margins.

Al-Amin calls for issuing two versions of the digital dirham, one for local use and another for international transactions, adopting blockchain technology and linking each transaction to a verified digital identity.

The Digital Dirham and Enhancing Financial Transparency

The announcement by Bank Al-Maghrib's governor regarding digital payments across borders comes in the context of a path that began in 2021 with an in-depth study to explore the feasibility of issuing the digital dirham to improve the efficiency of the payment system.

By 2024, Morocco is among over 130 countries studying the launch of central bank digital currencies, according to a joint report by the World Bank and the Alliance for Financial Inclusion.

Al-Wasini confirms that adopting the digital dirham will help enhance financial transparency through enabling precise tracking of transactions, which limits manifestations of corruption associated with traditional cash.

He believes that this transformation will improve the efficiency of financial supervision and strengthen the state's economic performance.

Meanwhile, management and finance expert Abdellilah Attar sees the digital dirham as an essential tool for expanding the scope of financial inclusion in Morocco.

Attar points out in a statement to Al Jazeera that the implementation will be gradual, starting in qualified areas similar to experiences in other countries, while emphasizing the need to provide a strong technical infrastructure due to the high prevalence of current financial transactions relying on paper cash.

The rate of financial inclusion in Morocco improved to reach 44% in 2023 compared to 29% in 2017; however, it remains relatively low, while the Ministry of Economy and Finance aims to raise it to 70% or more over the next decade.

Precise Legislation

The digital currency requires establishing a comprehensive legal framework that defines the issuance and trading details, ensures compliance with international standards, and protects the country from cross-border risks.

In this context, Attar points out that any financial innovation cannot be adopted without the availability of two essential pillars: the legal framework and the regulatory framework.

Attar recalls the experience of participatory finance that has faced delays in its activation in Morocco despite its international spread until a legal framework was established governing its related transactions.

For his part, blockchain and digital currency expert Badr Blaj stresses that the legal framework for the digital dirham must include strict rules to combat money laundering and terrorism financing, complying with the standards of the Financial Action Task Force, particularly regarding tracking suspicious transfers and 'Know Your Customer' procedures.

He emphasizes the need to define the tax system for digital transactions, especially cross-border ones, clarifying value-added tax and profit taxes.

Blaj sees in a statement to Al Jazeera the importance of respecting personal data protection laws, defining the authority responsible for issuing the digital dirham and supervising its trading, in addition to establishing clear rules for wallets and digital platforms, including caps for individual transfers, ensuring harmony between legislation and banking laws and payment means laws.

Protection and Rights

The digital dirham project faces complex regulatory, security, and legal challenges. Here, Blaj affirms that protecting users from fraud requires strict laws to ensure the suitability of digital projects before allowing them to interact with citizens, along with establishing an official security badge for projects compliant with standards.

On the technical side, Blaj notes that digital currency technologies offer high levels of protection against breaches, but human errors remain a key entry point for advanced attacks on wallets and digital platforms.

He suggests launching extensive awareness campaigns for users, requiring platforms to adopt strict protection standards and holding them legally accountable for any failures in that regard.

Al-Wasini also raises concerns regarding the potential use of the digital dirham as a tool for monitoring individuals' financial flows, which could limit financial freedom.

He warns of the risks of privacy violations in the absence of clear safeguards to protect personal data.

He believes that adopting a balanced legal framework that achieves transparency and fights corruption without infringing on financial rights and privacy will enhance citizens' trust and facilitate the success of this strategic digital transformation.

Source: Al Jazeera