Algeria has officially joined countries like China in placing a blanket ban on all cryptocurrency-related activities. The country declares that it’s now illegal to trade, own, mine, or use digital assets.
Enacting Law No. 25-10 on July 24, Algeria made the move to ban the issuance, sale, purchase, holding, use, and promotion of all crypto assets, including Bitcoin. The law also criminalizes mining, the use of digital wallets, and the operation of cryptocurrency trading platforms. This move marks a significant regression in the country’s cryptocurrency future, as global adoption speeds up.
Algeria’s Crypto Ban Aims to Strengthen the Financial System
In Algeria’s defense, enacting Law No. 25-10 will strengthen the country’s monetary system against crime and terrorism, which includes cryptocurrency finance in some parts of the world like North Korea. The country also said its decision aligns with global standards, especially those set by the Financial Action Task Force (FATF), and mitigates the growing use of digital assets among tech-savvy Algerian youths.
What the law entails now is that crypto use is officially treated as a financial crime under anti-terrorism laws. Digital assets are now regarded as property, income, or funds, and violators may face up to 1 year in prison with fines reaching 1,000,000 dinars or $7,000. Penalties could worsen if the violations are connected to organized crime or a syndicate.
Crypto Ban Will Impact Exchanges, Users
Banning all crypto-related activity is a huge blow to an expanding ecosystem in Algeria. The move will affect crypto exchanges, such as Bybit and Binance, which are currently accessed through VPNs. With this ban, there’d be increased and supervised monitoring by the judicial, financial, and security authorities.
Standing by the decision means that Algeria is shutting its doors to innovation and economic opportunities associated with blockchain technology. Cryptocurrency and blockchain are thriving in other countries, creating employment opportunities, attracting investments, and fostering financial inclusion. Algeria risks falling behind its counterparts with this ban.
For users, it’s a big setback, knowing that their peers in other forward-thinking countries with flexible crypto rules are enjoying crypto services and their benefits. In countries with a volatile economy, crypto offers an alternative store of value. Algeria’s ban restricts financial freedom and access to global markets for the youth population.
Algeria Joins China, Others in Taking a Hardline Stance
Algeria isn’t the only country to take a hard stance on cryptocurrency. Several other nations have enacted a blanket or partial ban on crypto-related activities for various reasons.
China was the first to initiate a crackdown on cryptocurrency. Following years of tightening digital assets, the country finally banned all forms of crypto transactions and mining in 2021, a decision that drew widespread reaction from enthusiasts and traders. The market was also shaken by the news, as Bitcoin and other major altcoins recorded losses.
The Chinese government cited financial risk and environmental concerns from mining as major reasons for the ban. Also, the prohibition stemmed from the desire to promote the CBDC, digital yuan, a program the government has piloted for years. Despite the ban, some Chinese still run underground trading on offshore exchanges.
Bangladesh, Morocco, and Nepal are other countries with crypto prohibitions. Bangladesh considers cryptocurrency use illegal under the Money Laundering Prevention Act. Morocco has had a strict prohibition on cryptocurrency use since 2017, but still ranks among the top African countries with Bitcoin trading transactions on P2P platforms. Nepal has been making arrests since 2022 for suspected crypto trading and mining after declaring all crypto activities illegal.
Will Algeria Ever Reverse the Ban?
Algeria’s outright prohibition of cryptocurrency highlights how crypto is being treated in tight economies. The government labels them as a threat to financial security and monetary systems. It’s unlikely that Algeria will change its stance on the matter, given that countries with similar declarations, such as China and Morocco, are adamant about their decisions.
However, the ban isn’t completely pushing cryptocurrency into the ground. Remember, many Algerians still access some crypto platforms via VPN and P2P to bypass regulatory oversight. While there’d be increased monitoring, using VPNs and other bypass tools will create a dangerous environment that will breed illicit activities, such as fraud and scams. This further increases the risks that the government may look into again.
