While the amount of the tourist allowance allocated to Algerians to travel abroad is considered derisory and set at 15,000 dinars, or nearly 100 euros at the official exchange rate, a debate has opened in the National Assembly during the past week in order to claim a revaluation of this sum. This is in comparison with neighboring countries such as Morocco where the annual tourist allowance per person amounts to 100,000 dirhams since January 2022 and Tunisia whose allowance amounts to 2500 dinars.
To alleviate this problem, a possible solution would be to introduce a digital currency in Algeria which would offer more advantages and a better alternative to fiat currency.
Development of a digital currency in Algeria: advantages and possible applications
Bitcoin is the most widely used virtual asset because it is fully decentralized and therefore cannot be regulated by any financial institution or government. It is also less expensive and faster than a traditional transaction with the intermediation of a third party. With a significantly higher market capitalization than other cryptocurrencies, Bitcoin is also very popular and represents an excellent hedge against inflation and an attractive form of investment thanks to its underlying technology, the blockchain.
The introduction of Bitcoin in Algeria would have a number of advantages that could benefit the hospitality sector. The hospitality sector has been one of the main sectors affected by the Covid-19 pandemic but has seen a resurgence in activity this summer of 2021. If a digital currency were adopted in Algeria, it could allow businesses in the hotel industry to carry out simplified and less costly transactions on an international scale. Additionally, by allowing Algerian hotels to easily accept Bitcoin, international travelers could gain access to local hotel services without having to exchange their local currency for cash.
🇩🇿| According to the Prime Minister, Aïmene Benabderrahmane, the Bank of #Algeria is preparing to create a new digital currency, the digital Algerian dinar, to boost the digitization of payments. #Algeria #Bank pic.twitter.com/mMcg7pEexj
— The Algerian Post (@TheAlgiersPost) December 26, 2022
Digital currency could also be useful for modernizing the Algerian banking system and providing a legal framework for Algerian exchange offices. Indeed, the latter has experienced a surge in the course of the euro against the Algerian dinar in recent times due to the hypotheses put forward by experts on a possible change in the Algerian currency.
To authorize virtual currency in Algeria, the Council of Ministers discussed in December 2022 a draft law amending and supplementing the ordinance relating to currency and credit in order to adapt the legal provisions to digital currency and to:
Create new opportunities
- – Open exchange offices.
- – Set up a financial stability committee.
- – Establish a national payments committee responsible for drawing up a national strategic plan for the development of means of payment.
The benefits of using digital currency don’t stop with transactions alone. Central banks and the government will also be able to benefit from these advantages if they choose a voluntary subscription to the Algerian digital currency.
On the one hand, it will allow central banks to effectively and transparently monitor the flow of money and on the other hand, it will allow banking institutions to access additional liquidity to finance national projects and encourage growth. more stable and durable.
Reduce corruption
Furthermore, the use of digital currency in Algeria could also reduce corruption and encourage greater transparency since the system is fundamentally decentralized and blockchain-based.
Blockchain technology is able to continuously track financial flows, allowing public and private organizations to control and monitor their operations to ensure compliance and identify and correct fraud.
Promote financial inclusion
Finally, the introduction of a digital currency in Algeria could promote the financial inclusion of marginalized populations. These people would be able to more easily access banking services and modern financial technologies in order to actively participate in the global economy. Even small and medium enterprises could save money on bank charges and benefit from better financial accessibi ability.
In conclusion, the use of digital currency would provide substantial benefits to consumers, businesses, and financial institutions alike. It would improve the Algerian banking system, reduce corruption and encourage financial inclusion. Although there is still a lot of work to be done to adopt this virtual currency, especially in terms of regulation and risk management, it is clear that this virtual currency is a viable alternative to fiat currency and could benefit all those who participate in it. Now is the time for the Algerian government to take the necessary steps to implement this technological solution in 2023.
