Algeria -- Custody Regulations Regulatory Overview

Algeria has a highly restrictive stance on cryptocurrencies and digital assets. This fundamentally impacts the existence and nature of any custody regulations.

Overall Stance: Prohibition of Cryptocurrencies

Algeria officially prohibits the use, possession, and trading of cryptocurrencies within its borders. This prohibition is codified in law. As a result, there are no specific regulations for the custody of privately issued cryptocurrencies or digital assets, because the assets themselves are not legally recognized or permitted.

Specific Regulatory References:

The primary legal basis for the prohibition is:

• Law No. 18-10 of August 2, 2018, on Money and Credit (Loi n° 18-10 du 2 août 2018 relative à la monnaie et au crédit).

  • This law, amending and complementing Ordinance No. 03-11 of August 26, 2003, includes a critical provision:

  • Article 51 bis explicitly states: "Any acquisition, disposal, management, use, possession, or dealing with virtual currency is strictly prohibited." It also classifies transactions involving virtual currencies as offenses punishable by the penalties provided for in the laws and regulations in force.

  • Regulatory Reference (in French): While a direct, stable, public URL to the official Algerian government gazette for this specific law can be difficult to consistently provide, the law and its Article 51 bis are widely cited in legal analyses concerning Algeria. You can find references on legal information portals or within the official Algerian Journal (Journal Officiel de la République Algérienne Démocratique et Populaire) archives for the specified date.

  • Example of a reputable legal portal citing it: Juris Alger (various articles discuss it).

Implications for Custody Regulations:

Given the outright prohibition, the specific categories of custody regulations you inquired about do not exist for private cryptocurrencies/digital assets in Algeria:

1. Custodial License Requirements: There are no licenses for cryptocurrency custodians because the underlying activity of dealing with cryptocurrencies is prohibited.
2. Segregation of Client Assets Rules: Not applicable, as there are no legal entities permitted to custody client crypto assets.
3. Insurance/Bonding Requirements: Not applicable.
4. Cold Storage Mandates: Not applicable.
5. Qualified Custodian Definitions: There are no legal definitions for qualified custodians of cryptocurrencies, as their operation is illegal.
6. Pending Custody Legislation: There is no known pending legislation specifically for the custody of private cryptocurrencies. The focus remains on maintaining the prohibition.

Potential Future Developments (Central Bank Digital Currency - CBDC):

It is important to distinguish between private cryptocurrencies and a potential Central Bank Digital Currency (CBDC). The Bank of Algeria has shown interest in exploring a digital version of its national currency, the Dinar, to modernize its payment systems and improve financial inclusion.

• Bank of Algeria Statements: The Governor of the Bank of Algeria has, on several occasions, discussed the potential for a "digital dinar." This exploration, however, does not signify a change in the country's stance on privately issued cryptocurrencies. A CBDC would be a liability of the central bank, fundamentally different from decentralized cryptocurrencies like Bitcoin or Ethereum.
• Regulatory References for CBDC Discussions: These are typically found in official statements, press releases from the Bank of Algeria, or reputable financial news outlets reporting on the Bank's activities. For example, news articles often quote the Bank of Algeria's Governor discussing a digital dinar project.

Conclusion:

Algeria maintains a firm prohibition on cryptocurrencies and related activities. Consequently, there are no specific regulations concerning cryptocurrency custody, custodial licenses, asset segregation, insurance, cold storage, or qualified custodian definitions. While the country may explore a Central Bank Digital Currency in the future, this does not alter its current ban on private cryptocurrencies. Individuals and entities dealing with cryptocurrencies in Algeria risk significant legal penalties.