Algeria has introduced a new law that prohibits all activities with crypto currency. It concerns trade, property, mining and promotion of digital coins. The measure, which entered into force on July 24, is expanding the earlier prohibition from 2018. Then the possession and exchange of crypto currency was banned, but mining remained allowed.
Prohibition must prevent illegal money flows
The Algerian government states that the prohibition is necessary to combat money laundering and the financing of terrorism. The law is a supplement to the 2005 rules that are aimed at preventing financial crimes. Violators risk prison sentences of two to twelve months and/or a fine between 200,000 and 1 million dinar (around $ 1,500 – $ 7,700). Serious crimes, such as organized financial crime, can lead to even more serious penalties.
Algeria chooses opposite course compared to other countries
While many countries relax cryptore rules, Algeria opts for a harder approach. Even China, which pursued a strict policy for years, announced a relaxation earlier this month. Moreover, the earlier ban in Algeria was unable to prevent the cryptomarkt from grew.
“Algeria is now the sixth largest country in the Mena region in terms of Cryptowaarde received,” Said Matthias Bauer-Langgartner, Head of Policy Europe at Chainalysis. He emphasizes that broad prohibitions, according to international organizations such as the FATF, are “difficult to effective”.
Experts: Crypto ban drives trade underground
According to experts, total prohibitions often have the opposite effect. Bauer-Langgartner warns that this way cryptotransactions shift to the black market, where users are unprotected. This makes supervision and investigation of illegal activities.
Ari Redbord, policy director at TRM Labs, adds: “It is almost impossible for one country to completely force a ban. Transactions take place across borders and via foreign platforms. In countries such as China, India and Nigeria, crypto activities continued as usual.”
Regulation better alternative to prohibition
More and more experts argue for smart regulation instead of a total ban. By recognizing trading platforms and allowing them to comply with transparent rules, governments can better supervise and protect consumers. At the same time there is room for innovation.
“Instead of forbidding, regulation is a more effective approach,” Says Redbord. “It makes activities visible, facilitates enforcement and ensures a safer ecosystem.”
With this new ban, Algeria goes against the international trend of liberalization. Experts doubt whether this hard approach will be successful in the long term.
Source: https://newsbit.nl/algerije-verbiedt-cryptovaluta-volledig-ondanks-wereldwijde-trend/
