Exploring the Digital Dirham: Feasibility and Risks
Bank Al-Maghrib has unveiled the findings from technical studies and experiments regarding the potential issuance of a national digital currency, referred to as the 'digital dirham.' This initiative is grounded in the technical feasibility of the project; however, the bank has also highlighted significant challenges related to financial stability, data protection, cybersecurity, and the risk of a portion of bank deposits transitioning to this new currency. These insights emerged from a study published by the central bank on Friday, October 9, 2026, titled 'Central Bank Digital Currency: Challenges and Lessons Learned for Morocco,' which was prepared by researchers Shaima Al-Shawi, Kamal Lahlo, and Mohamed Miko. The study is part of two research documents dedicated to analyzing the future of digital currencies and their economic and financial impacts.
The research indicates that Bank Al-Maghrib has conducted technical experiments in collaboration with the International Monetary Fund (IMF) and the World Bank to test a prototype digital currency intended for individuals and businesses. This model involves the issuance of currency by the central bank, while banks and payment institutions will handle distribution and manage user relationships. The tests included the issuance and distribution of the currency, its storage in digital wallets, and payment transactions between individuals, along with assessing its compatibility with current payment infrastructure using both centralized and distributed ledger technologies.
Potential Benefits and Legislative Considerations
The experiments concluded that the technical issuance of the digital dirham is feasible; however, the study emphasized that the project's success hinges not solely on technology but also on the presence of legal, institutional, and economic conditions. Moreover, it is crucial to ensure the trust of citizens and merchants in this new payment method. Among the project’s objectives is the enhancement of financial inclusion, particularly for citizens without bank accounts or those living in rural and remote areas. This initiative aims to reduce financial transaction costs and facilitate electronic payments. The study noted that as of 2025, only 62% of individuals residing in Morocco had bank accounts, indicating that a significant portion of the population remains outside the banking services spectrum.
The project also presents an opportunity to improve cross-border financial transfers, particularly for Moroccans living abroad, whose remittances constitute a significant source of national income, averaging around 8% of the Gross Domestic Product (GDP) in recent years. Additionally, the study revealed that Bank Al-Maghrib has engaged in an experiment related to cross-border payments in partnership with the Central Bank of Egypt and supported by the World Bank, aiming to explore ways to reduce the costs of financial transfers and expedite their settlement.
However, the study cautioned against potential risks associated with the adoption of the digital currency, particularly the potential shift of bank deposits to digital wallets linked to the central bank, which could impact the liquidity of banking institutions and their ability to finance the economy and provide loans. Consequently, the study suggests the possibility of setting limits on the amounts individuals can hold in digital dirhams, alongside implementing a model that ensures the continued role of banks and payment institutions in the financial system.
The introduction of the new currency also raises concerns regarding privacy protection, as authorities will need to strike a balance between maintaining the confidentiality of users' financial transactions and ensuring the monitoring of suspicious activities related to money laundering and terrorism financing. Furthermore, the study explored the feasibility of using the digital dirham offline to ensure the continuity of payment operations in areas with poor connectivity or during technical failures that disrupt communication services.
The researchers reviewed international experiences from countries such as China, India, the Bahamas, Nigeria, and Jamaica, noting that the launch of a digital currency does not necessarily guarantee public acceptance; its success is tied to the practical benefits it offers compared to cash and available electronic payment methods. The study emphasized that the digital dirham will not serve as a mandatory replacement for banknotes and coins but rather as a complementary payment method. It also underscored the importance of gradually transitioning to this new monetary format while assessing risks and economic impacts.
In conjunction with this study, Bank Al-Maghrib published a second research paper employing a macroeconomic model to estimate the potential impacts of introducing the digital currency on the Moroccan economy. The findings suggest that modest production gains could be achieved in the long term, enhancing the economy's resilience to certain financial shocks. Despite these encouraging technical results, the publication of both studies does not equate to an official decision regarding the issuance of the digital dirham or a timeline for its launch. The authors also noted that the views expressed in the first research do not necessarily reflect the official stance of Bank Al-Maghrib.
As reported by alyaoum24.com.
