Rabat — As the world is undergoing a massive digital monetary transformation, Morocco is looking to establish itself as a regional and continental model of financial modernization, inclusion, and sovereignty.
Bank Al-Maghrib (BAM), the country’s central bank, recently introduced its plan to develop a Central Bank Digital Currency (CBDC), also dubbed the “e-Dirham,” with the goal of accelerating the transformation of the Moroccan financial landscape.
In an interview with Morocco World News (MWN), economist expert Aicha El Alaoui, a Professor at Sultan Moulay Slimane University in Beni Mellal, provides crucial insights into this transformative project that could reshape Morocco’s economic future.
The strategic vision behind e-Dirham
At a recent seminar of the African Central Banks Association (ABCA) in Rabat, BAM Governor Abdellatif Jouahri confirmed that the central bank has already conducted its first pilot focused on peer-to-peer retail payments.
BAM is now preparing for a new phase of experimentation centered on cross-border payments, particularly in partnership with the Central Bank of Egypt, with support from the World Bank and the International Monetary Fund (IMF), the governor explained.
This measured approach reflects Morocco’s commitment to prudent yet ambitious modernization of its national payment system, with financial inclusion as a primary objective.
Strategic benefits: a multi-dimensional impact
Financial inclusion revolution
According to El Alaoui, the e-Dirham could serve as a strategic lever for modernizing Morocco’s monetary system with far-reaching implications. “With the emergence of the digital economy following the fourth industrial revolution, implementing a CBDC could constitute a strategic tool for modernizing the Moroccan monetary system,” she explains.
The most immediate beneficiaries would be Morocco’s unbanked population. The e-Dirham would offer a secure and accessible alternative for people without traditional bank accounts; a simple mobile phone would suffice for transactions.
This democratization of payments would, El Alaoui said, particularly benefit various categories of workers and employers, including those in the informal sector, small businesses, and cooperatives, as well as different territories across the country, including rural, mountainous, and Saharan areas, while reducing dependence on cash usage.
Monetary sovereignty in the digital age
In an era where private cryptocurrencies and digital dollarization pose threats to national currencies, the e-Dirham represents a crucial defense mechanism.
“The e-Dirham would constitute a bulwark against competition from private crypto-assets and the risks of digital dollarization,” El Alaoui notes.
By anchoring digital transactions within BAM’s scope, Morocco would preserve the primacy of the dirham while strengthening control over financial flows, including those from the informal sector.
The expert clarifies that this approach contributes to maintaining macroeconomic balance and mitigating the impact of external shocks on the national economy, a particularly relevant consideration given global financial volatility.
Cross-border payment transformation
Perhaps the most revolutionary aspect lies in international transactions. The expert envisions a scenario where transfers between Morocco and other countries, particularly African nations, would become faster, less costly, and more transparent.
This transformation would significantly impact diaspora remittances and regional trade.
She further forecasts that the partnership with Egypt, supported by the IMF, could pave the way for creating intra-African digital corridors. This, coupled with the North African country’s strategic location, would boost commercial exchanges and consolidate Morocco’s position as a strategic financial hub between Africa and Europe.
Navigating the risk landscape
Cybersecurity and privacy challenges
Despite its promise, the e-Dirham faces significant challenges that require rigorous management.
El Alaoui identifies the centralized nature of the e-Dirham as a potential vulnerability, making it a target for sophisticated cyberattacks that could compromise financial system stability in the case of major security breaches.
While facilitating fraud prevention, complete traceability of transactions raises important privacy concerns.
“This requires a delicate balance, such as establishing limits for anonymous transactions similar to China’s e-yuan,” she suggests.
Systemic economic risks
On the economic front, systemic risks are equally concerning. Massive bank disintermediation, with deposits transferring to BAM, could reduce banks’ credit capacity and slow investment.
Additionally, the instant convertibility of deposits to CBDC could, during crises, amplify panic movements and accelerate digital “bank run” phenomena.
To mitigate these risks, El Alaoui advocates for a prudent approach combining measures such as capping e-Dirham amounts, maintaining commercial banks’ role in distribution, and strategic investments in resilient infrastructures, leveraging Moroccan expertise in fintech and cybersecurity.
Distribution strategy: balancing innovation and stability
The choice of distribution model represents a strategic balance between monetary sovereignty and financial stability.
While a direct model where BAM would manage citizens’ digital wallets would allow optimal money supply control and homogeneous technological implementation, it carries three major risks: disproportionate operational burden for the central bank, accelerated banking disintermediation, and limited innovation capacity in financial services.
El Alaoui favors a hybrid model, already proven in China and the Bahamas, which seems better suited to the Moroccan context.
By relying on commercial banks and authorized payment service providers (PSPs) to distribute the e-Dirham, Morocco could leverage their existing infrastructures and customer expertise.
This approach offers two major advantages: preserving the banking ecosystem while deposits remain on banks’ balance sheets, allowing them to maintain their role in financing the economy, and accelerated innovation, with institutions able to develop hybrid services combining traditional dirhams and e-Dirham.
African integration: a continental vision
Strategic interoperability
Morocco’s reopening to Africa offers a strategic opportunity to integrate the e-Dirham with other African CBDCs and platforms like PAPSS (Pan-African Payment and Settlement System).
This integration could support major continental projects, including the Atlantic Project and the Nigeria-Morocco gas pipeline, while facilitating intra-African trade within the AfCFTA framework.
“By reducing dependence on the dollar and euro, decreasing transaction costs, and accelerating diaspora fund transfers, this initiative would strengthen Morocco’s position as a continental financial hub,” El Alaoui explains.
Geopolitical implications
In a geopolitical context marked by Sino-American rivalry and the emergence of a multipolar economic order, developing autonomous monetary infrastructures has become imperative for Africa.
The interoperability of the e-Dirham with other African systems would constitute a major advance toward deeper financial integration and greater economic independence.
Building the supporting ecosystem
Leveraging existing initiatives
BAM’s existing initiatives provide a solid foundation for successful e-Dirham deployment.
The Morocco FinTech Center could play a key role as an experimentation platform, enabling digital currency testing in collaboration with local startups and adapting solutions to Moroccan market specificities.
Advanced technologies like electronic signatures and biometrics could guarantee secure authentication, fundamental for establishing user confidence.
Meanwhile, Open Banking development would facilitate seamless e-Dirham integration into existing banking and financial applications.
Addressing the digital divide
For inclusive and equitable adoption, the expert believes that several major challenges must be addressed.
First, improving access to affordable, reliable internet across the Moroccan territory, particularly in rural and mountainous areas.
Second, strengthening digital skills among populations and local professionals is essential for creating an ecosystem capable of supporting this innovation.
As El Alaoui notes, referencing King Mohammed VI’s latest Throne Speech: “There is no place, neither today nor tomorrow, for a Morocco advancing at two speeds.” Developing a resilient and balanced FinTech ecosystem at the country’s regional scale is crucial to avoid digital disparities and ensure inclusive, balanced, and fair growth.
More than digital currency
Morocco’s e-Dirham initiative represents far more than simple currency digitization, with BAM hoping it will quickly start a comprehensive transformation tool for the country’s financial landscape.
The success of this economic milestone will depend on a careful balance between innovation and stability, inclusion and security, national sovereignty and international cooperation.
As Morocco prepares for this digital monetary revolution, the expert analysis suggests that with proper implementation, the e-Dirham could become not just a digital currency but a genuine tool for equitable development and financial emancipation for all Moroccan citizens.
Yet, as El Alaoui conceded, the journey ahead requires navigating complex technical, regulatory, and social challenges.
With Morocco’s established expertise in fintech, a measured approach to implementation, and a clear focus on inclusion, the e-Dirham could indeed position the country as an African pioneer in decentralized finance, while serving as a model for other emerging economies embarking on similar digital transformation journeys.