Algeria has introduced one of the continent's strictest crackdowns on cryptocurrencies, officially banning all crypto-related activities. Under the newly amended Law No. 25-10, violators face up to one year in prison and fines reaching $7,700. This comprehensive measure prohibits the buying, selling, trading, holding, mining, and even the promotion of digital currencies such as Bitcoin and Tether.
A Firm Response to Global Crypto Trends
The law, enacted on July 24 and reported by local outlet Fibladi, signals Algeria’s hardline stance amid the global boom in digital assets. The government has long expressed unease over cryptocurrencies, citing their potential to undermine national financial stability and security. The ban follows guidance from the Financial Action Task Force (FATF), which advises on strategies to combat money laundering and terror financing.
An Expansion of Existing Restrictions
While Algeria previously restricted cryptocurrencies under financial regulations introduced in 2018, this latest move significantly expands the scope. The law now criminalises not only the use and trading of crypto but also mining, digital wallet services, and the operation of any crypto exchange. It reflects a shift from passive regulation to active enforcement, closing all legal avenues for public participation in the crypto economy.
Concerns Over Energy Use and Financial Stability
Officials point to rising crypto use, particularly among Algeria’s youth and in southern regions where low electricity costs have made off-grid mining profitable. The government argues that such activities strain the national power grid and pose risks to economic stability. With these concerns mounting, authorities say the ban is necessary to protect the financial system and prevent illicit financial flows.
A Regional Pattern of Crypto Caution
Algeria's decision aligns with a broader regional trend, where several African nations have imposed their crypto bans. Egypt outlawed cryptocurrency trading in 2018, partly under religious guidance, declaring crypto haram due to its speculative nature. Morocco similarly prohibited digital currencies in 2017, citing the need to safeguard consumers from market volatility and financial crime.
Not All of Africa Is Closing the Door
While North African countries tighten regulations, others are moving in the opposite direction. The Central African Republic made headlines in 2022 by becoming the first country in Africa to adopt Bitcoin as legal tender, later launching its memecoin, $CAR. Nigeria, which once restricted crypto activity, has since lifted bans and is exploring the full potential of blockchain-based assets for its financial system.
Enforcement Challenges May Persist
Despite Algeria's tough legal stance, past examples suggest that enforcement could be challenging. Nigeria’s 2021 crypto ban prompted users to adopt peer-to-peer platforms, while China’s clampdown on digital assets simply shifted activity to decentralized exchanges. Algeria may face similar outcomes, with users turning to underground channels and privacy-focused technologies to bypass restrictions.
Potential Economic Trade-Offs
Though authorities stress the need for control, critics warn that Algeria’s aggressive approach could stifle innovation and deter investment in the digital economy. Blockchain technology, which underpins cryptocurrencies, has been a driving force for tech development in regions with supportive policies. By outlawing crypto entirely, Algeria risks isolating itself from global fintech trends and missing out on economic opportunities.
Algeria’s comprehensive ban underscores the deep divide across Africa regarding cryptocurrency regulation. While some nations embrace digital assets for innovation and inclusion, others prioritize financial control and risk mitigation. For Algerians, the decision limits access to a fast-evolving global financial landscape, leaving the long-term implications open as the world increasingly leans toward digital finance.