Algeria Enacts Comprehensive Ban on Cryptocurrencies
In brief
The Algerian government has tightened its stance on cryptocurrencies by extending provisions within the country’s 2018 Financial Law, effectively prohibiting any and all crypto-related activities nationwide, including trading, ownership, mining, and associated services.
This new regulation imposes severe penalties for violations, including fines of up to 1 million Algerian dinars (approximately US $7,700) and prison sentences ranging from two to twelve months.
The legislative expansion contradicts the global trend toward crypto market liberalization. Experts highlight that such comprehensive bans are generally ineffective due to difficulties in enforcement, as cryptocurrency activity often migrates to unregulated or underground platforms.
Effectively from July 24, the expansion of Algeria’s Financial Law amends and broadens the original prohibition on exchanging and holding cryptocurrencies, which was introduced in 2018 but excluded mining activities.
The new legislation incorporates aspects from the 2005 law on Preventing Money Laundering and Financing Terrorism, positioning the ban as a measure to combat illicit financial flows and designated the restrictions as fully banning all cryptocurrency activity without exception.
Furthermore, the scope explicitly includes banning the issuance and promotion of cryptocurrency tokens, as well as providing trading services related to digital assets. The recent law applies retroactively, meaning existing activities fall under the new stricter guidelines.
Algeria bucks the crypto trend
By introducing a particularly comprehensive ban, Algeria diverges from a global movement towards legalizing or liberalizing cryptocurrency markets. Notably, China announced a shift in its formerly hardline policy around the same time in July.
However, commentators maintain that complete bans are rarely successful in halting cryptocurrency usage. Algeria itself exemplifies this paradox; despite a crypto market ban initiated in January 2018, the nation remains a significant player in cryptocurrency value transfers, ranking sixth in its Middle East and North Africa region according to Chainalysis’ 2024 Geography of Cryptocurrency Report.
International financial organizations acknowledge the challenge of effectively implementing broad-based cryptocurrency prohibitions, as highlighted by the Financial Action Task Force (FATF). Experts contend that rather than eradicating crypto activity, comprehensive restrictions often push the ecosystem into underground markets, hindering law enforcement efforts and consumer protection.
“Rather than eliminating activity,‘‘ broad-based restrictions tend to drive the crypto ecosystem underground, fuelling gray markets where users lack safeguards and protections.’’This makes it harder for law enforcement…” – Matthias Bauer-Langgartner, Chainalysis
“It’s incredibly difficult for any single jurisdiction to fully enforce a ban when transactions can move instantly across borders and platforms… We’ve seen this in countries like China, India, and Nigeria, only to see crypto activity continue—often through underground markets or foreign platforms.”
“Instead of outright bans, the more effective approach is regulation that brings activity into the light…” – Ari Redbord, TRM Labs
Ultimately, experts favor a regulatory approach that legitimizes exchanges under specific compliance standards, enabling authorities to monitor and mitigate risks without completely suppressing the sector, which often proves counterproductive anyway.
