Falling prices, inflation … How has the crisis in Ukraine encouraged the use of cryptocurrencies?

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What impact has the crisis in Ukraine had on the use of cryptocurrencies?

The use of cryptocurrencies was accelerated during this period for two main reasons. First of all, several new investors were waiting for the drop in cryptocurrency prices to enter the market, people who missed the first wave and were unable to buy Bitcoin when it was up to $ 67,000 and who were expecting a drop.

As the crisis in Ukraine affected all financial markets, including the cryptocurrency market, the price of Bitcoin, for example, dropped to $ 35,000, which was a real opportunity and a catalyst for new investors to join. ‘wave and that old users strengthen their portfolios.

The second reason is that many people have realized how much geopolitical circumstances can impact the traditional financial system. The sanctions put in place against Russia have strengthened the narrative on which cryptocurrencies are based: the international regime is a fragile regime serving the benefits of only a few countries. This situation has therefore called into question the relevance of the current financial system and several people have therefore sought an alternative in cryptocurrencies.

Is the trend the same in Morocco?

For Morocco the rule does not change, this instability that constitutes a stimulus for the adoption of cryptocurrencies, but in addition to the Ukrainian crisis, it is the financial crisis in general and the unprecedented level of inflation that have accelerated the trend. Many people now believe that the national currency could lose its value over time due to inflation, and so they try to invest their savings. Many young people see cryptocurrency as a solution to protect the value of the money they hold in the face of signs of a global economic crisis.

In their latest press release, the Foreign Exchange Office and BAM mention the risks of money laundering and the financing of criminal activities related to the use of these currencies. Is there a way to counter these dangers?

The risks invoked are completely legitimate, but they are more so in the case of cash, because cryptocurrencies are highly traceable systems: we know the duration and circuits of each Bitcoin from its creation until today. For example, in 2017 a hacker broke into a cryptocurrency information system with nearly a billion dollars worth of cryptocurrencies, but we were able to unmask it a few years later because the authorities had an eye on the transaction codes and could identify the people they were about to go to. acquire these currencies to return to the criminal.

What remains to be put in place is regulation to license platforms for buying and selling cryptocurrencies so that you can control who buys and who holds this or that wallet. You just have to put barriers to entry and exit because cryptocurrencies are not yet universally adopted and it is still necessary to convert them into fiat currency for certain goods or services. In Morocco it is certain that we cannot buy bread with Bitcoins, it will have to be sold against the dirham, and it is therefore also this buying and selling process that will have to be regulated.

But you should know that, on the contrary, it is precisely the ban to promote all the risks invoked by the authorities, since it gives rise to a black market in which we do not know the people who are in the process of trading, to buy and sell cryptocurrencies, because without regulation. , this system protects anonymity and does not impose inbound and outbound identification rules.

The Moroccan Capital Market Authority (AMMC) has also joined forces with BAM and the Foreign Exchange Office to warn against the use of cryptocurrencies. Do you think large companies would also be attracted to these currencies?

Even large companies can be attracted to cryptocurrencies to gain a competitive advantage and provide their customers with systems that create value. For example, the Visa company allows you to pay directly with the digital asset of your choice.

In Morocco, I do not believe that large companies have the desire to invest directly in cryptocurrencies, as is the case for some international structures, because it remains an uncontrollable subject for them, especially because the regulations still prohibit it.

But Moroccan companies may very well have this desire to create a next-generation system, allowing the use of cryptocurrency which is becoming more and more widespread and far exceeds mobile payment in the country. There is therefore a real interest in the direction of innovation to adapt to the evolution of the international ecosystem, and anticipate a generalization of the use of cryptocurrencies, which will eventually happen.

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