EXPLORING BLOCKCHAIN ADOPTION IN MOROCCO’S FOREX MARKET: IMPLICATIONS FOR COST REDUCTION, VOLATILITY CONTROL, AND FINANCIAL INCLUSION

Abstract

This study explores the transformative potential of blockchain technology within Morocco’s foreign exchange (forex) market, emphasising its capacity to enhance cross-border transaction efficiency, promote financial stability, and advance financial inclusion. It evaluates the implications of integrating blockchain into Morocco’s forex framework, particularly regarding transaction costs, exchange rate volatility, and inclusive access to financial services in the context of a developing African economy. Despite Morocco’s regulatory restrictions on cryptocurrencies since 2017, blockchain’s inherent advantages—such as reduced reliance on intermediaries, heightened transparency, and expedited international payments—are increasingly relevant to the country’s evolving economic context. Drawing comparative insights from countries including Nigeria, Brazil, India, and Kenya, which have successfully incorporated blockchain in financial systems, the study quantifies potential benefits. These include an estimated 30% decline in transaction costs (from 5% to 3.5%), a 20% reduction in exchange rate volatility, and an annual increase of approximately 332,000 financial transactions. Employing quantitative tools such as the Generalised Autoregressive Conditional Heteroskedasticity (GARCH) model for volatility analysis and Monte Carlo simulations to forecast long-term scenarios, the findings highlight blockchain’s significant potential in enhancing cost-effectiveness, stabilising currency exchange, and broadening financial access in Morocco. Nevertheless, the study also acknowledges persistent obstacles, including unclear regulatory frameworks, inadequate digital infrastructure, and limited public adoption of cryptocurrencies. These issues must be addressed through comprehensive regulatory reforms and public education initiatives to enable the effective integration of blockchain technology into Morocco’s forex market.