Authorities in Algeria are digging in their heels in their push to prohibit almost any activity related to cryptocurrencies with new legislation targeting specific transactions.
An update of the Algerian law on combating money laundering introduces harsh punishment for various operations with digital assets, including monetary penalties and prison terms.
Algeria turns back on Bitcoin, closing all doors for cryptos
Recent legislative amendments, an attempt to eradicate rather than regulate crypto, have been described as a “thunderbolt hitting cryptocurrencies in Algeria” by the local Algerie360 portal which, detailing the changes, concluded:
“In a decision without appeal, the country turns its back permanently on any form of use, creation or exchange of virtual currencies.”
The news outlet referred to a bill revising Algeria’s anti-money laundering (AML) rules. The updated legislation, which went into effect with its publication in the North African nation’s Official Journal on July 24, is quite repressive against digital assets and their users.
It adds “radical” provisions concerning specific operations with cryptocurrencies that amount to a zero-tolerance policy regarding a list of crypto-related activities and transactions, the report warned.
In its latest version, the law completely bans the “issuance of virtual assets of all kinds; their purchase, sale or possession; their use as a means of payment or investment; their promotion or advertising in any form.”
Under its new Article 6, the establishment and operation of platforms providing exchange or wallet services for cryptocurrencies have been prohibited as well.
In essence, this means that merely holding decentralized digital money like Bitcoin or even fiat-pegged stablecoins like those issued by Tether can now be interpreted as a crime in the country, the publication highlighted, elaborating:
“Behind this reform, the authorities intend to close the door to a universe perceived as opaque, unstable and out of control at a time when unregulated uses of cryptocurrencies are multiplying on a global scale.”
Algerians risk fines and jail if they do anything with cryptocurrencies
The Algerian government has been consistent in its hostile attitude towards cryptocurrencies. Its Financial Law from 2018 banned their use until at least 2025.
But amid high inflation and strict state controls on capital flows, many citizens of the Arab country continued to engage in crypto transactions, often of a peer-to-peer nature or involving foreign platforms.
The authorities in Algiers have also refused to legally recognize Bitcoin and the like to any extent, despite their popularity, leaving many Algerians vulnerable to prosecution and without any protection as consumers and investors.
While the financial act from a few years ago did list some crypto activities, including the purchase, sale and possession of “virtual currency,” it wasn’t nearly as specific as the new texts in the AML law.
The same applies to penalties for breaking the rules. According to Article 31a, offenders may be fined between 200,000 and 1 million Algerian dinars (almost $7,700), receive a prison sentence of up to 1 year, or get both, depending on the severity of their crime.
The sanctions are obviously tailored to dissuade any potential use of cryptocurrencies within the government’s broader attempt to increase state control over the national financial system while consolidating Algeria’s financial market.
Other countries with restrictive crypto policies in the region include Egypt, its largest economy, where the central bank has issued repeated warnings about cryptocurrencies but, nevertheless, allowed some platforms to continue to operate.
Neighboring Morocco banned digital asset transactions in 2017, citing concerns over financial crimes and potential negative effects on economic stability. However, its monetary authority has since recognized the wide spread of the digital assets and drafted a law to regulate them.
