Virtual currency


What is a virtual currency ?

Virtual currency is traditionally defined as a unit of account stored on an electronic medium and created not by a government or a monetary union, but by a group of natural or legal persons. It is used to settle multilateral trading of goods or services within this group.

Virtual currencies were conceived as an alternative to traditional currency. Initially developed among virtual communities, especially in the context of online games, they have multiplied and their uses have widened and now extend to the real sphere. 

How are the Bitcoins created ? 

Bitcoins are created through a decentralized process called mining. It is a monitoring process, whereby “mining” internet users check transactions and ensure network security, using specialized computer hardware. Their computers are put in competition and the one who wins the validation of the transaction receives in exchange new Bitcoins.

Bitcoin, a risky investment 

Since Bitcoin is based on an unregulated market, this virtual currency does not have an official exchange rate. It is a computer environment that has its own rules, which may not be suitable for people who are not sufficiently expert and technically savvy. On account of its high volatility, this market is risky.

The circulation of virtual currencies... 

Many virtual currencies are now in circulation. They can be purchased directly (on the internet, through bilateral transaction with another investor, from a virtual currency company, or by buying options on the internet, etc.) or indirectly, particularly through a virtual currency exchange or by borrowing them. There are currently more than 5,000 virtual currencies, the most famous of which are Bitcoin, Facebook Credits, Linden Dollars, and Ether. 

The use of virtual currencies in Morocco and related risks

being an unregulated activity, the Ministry of Economy and Finance, Bank Al-Maghrib and the Moroccan Capital Market Authority draw public attention to the risks associated with the use of virtual currencies, including in particular:

  • The lack of consumer protection:
    • The absence of regulatory protection to cover losses in the event of a trading platform failure;
    • The lack of a specific legal framework for the protection of users of these currencies in relation to the transactions carried out, especially in case of theft or misappropriation;
  • The volatility of the exchange rate of these virtual currencies against a legal tender currency;
  • Possible significant and unpredictable variation in the exchange rate either upward or downward, in a very short space of time;
  • The use of these currencies for illicit or criminal purposes, including money laundering and terrorist financing;
  • Non-compliance with the regulations in force, in particular those relating to capital markets and foreign exchange legislation.

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