Legal Crypto In Algeria

Is Cryptocurrency Legal in Algeria? (Laws, Taxes, and Market Report)

Introduction

Cryptocurrencies, decentralized finance (DeFi), and non-fungible tokens (NFTs) have disrupted global monetary systems, offering innovative methods for transactions, investments, and digital asset creation. However, their adoption varies significantly across regions. In Algeria, stringent legal restrictions heavily limit the use of digital currencies. This document examines the legality of cryptocurrencies in Algeria, applicable regulations, market exposure, and the state of DeFi and NFT markets, providing structured information through tables and lists.

Algeria Crypto Legislation and Law

Cryptocurrencies, including Bitcoin and Ethereum, are explicitly illegal in Algeria under the Finance Law of 2018. Article 117 of this law prohibits the use, purchase, sale, and possession of virtual currencies, defining them as digital value items used for trading goods and services without central bank issuance. All cryptocurrency-related activities, such as trading, holding, or payments, are illegal, with violators facing severe penalties, including fines and imprisonment. The government views cryptocurrencies as risks to financial stability and potential tools for money laundering, terrorism financing, and other crimes.

The Bank of Algeria and the Financial Regulation Commission have reinforced this stance. In 2017, the Bank of Algeria declared virtual currencies invalid as payment methods, a position upheld by subsequent laws with no revisions permitting cryptocurrency use as of May 2025.

Laws and Regulations in the Crypto Market

Algeria’s legal framework focuses on criminalization rather than regulation. Key laws and regulatory actions include:

Finance Law of 2018 (Article 117): This law forms the basis for the cryptocurrency ban, prohibiting all forms of virtual currency use, including payments and investments, to protect the national currency (Algerian Dinar) and curb unregulated financial practices.

Banking Law and Regulations: The Law on Money and Credit (Ordinance No. 03-11) mandates the use of the Algerian Dinar for all financial transactions, regulated by the Bank of Algeria. Cryptocurrencies, being decentralized, conflict with this system.

Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Regime: Law No. 05-01 imposes obligations on financial institutions to report suspicious transactions, citing cryptocurrencies’ decentralized nature as a risk for illicit activities.

Anti-Constituent Laws: The government highlights risks of scams and fraud associated with crypto assets, aligning with consumer protection laws.

Unlike some countries exploring blockchain through regulatory sandboxes, Algeria offers no such programs, stifling innovation and driving cryptocurrency activities underground.

Popular Exchanges and Exchange Methods

Due to the comprehensive ban, no legal cryptocurrency exchanges operate in Algeria. Major global platforms like Binance, Coinbase, or Kraken are inaccessible for legal trading, and their use violates Algerian law, exposing users to prosecution and financial risks without regulatory protection.

Despite the ban, some individuals engage in illegal trading through informal channels, including:

• Peer-to-Peer (P2P) Trading: Platforms like LocalBitcoins or social media classifieds facilitate direct cryptocurrency transactions, often for cash or bank transfers, conducted covertly to evade authorities.
• Foreign Exchanges via VPN: Some users access foreign exchanges using virtual private networks, though traceable transactions pose significant legal risks.
• Physical Meetups: Rare informal gatherings allow cryptocurrency enthusiasts to trade digital currencies for cash or goods, though such activities are limited due to legal consequences.

These methods operate in a legal gray area, exposing participants to scams, theft, and prosecution. The absence of regulated exchanges creates a fragmented and insecure cryptocurrency market in Algeria.

Algeria’s DeFi and NFT Market Prospects

Decentralized Finance (DeFi)

DeFi, which leverages blockchain for intermediary-free financial services like lending and trading, is virtually nonexistent in Algeria due to the cryptocurrency ban. DeFi platforms such as Uniswap, Aave, or Compound rely on cryptocurrencies, which are illegal under the 2018 Finance Law. Legal access to blockchain infrastructure is unavailable, preventing Algerians from participating in DeFi protocols.

Informal DeFi engagement may occur through underground networks like VPNs or P2P platforms, but such activities are minimal and illegal. The restrictive regulatory environment and lack of legal clarity hinder DeFi development, despite global interest in the sector.

Non-Fungible Tokens (NFTs)

NFTs, unique blockchain-based digital assets used in art, gaming, and collectibles, face similar restrictions in Algeria. As NFT transactions typically involve cryptocurrencies like Ethereum, the 2018 ban extends to NFTs. No legal marketplaces like OpenSea or Rarible operate in Algeria, and individuals engaging in NFT activities face the same legal risks as those trading cryptocurrencies.

While some countries are exploring NFT-specific regulations, Algeria has issued no statements on NFT governance. The reliance on cryptocurrencies and lack of a regulatory framework render the NFT market inaccessible to most Algerians.

Key Information on Cryptocurrency in Algeria

Aspect	Details
Legal Status	Illegal; banned under the Finance Law of 2018 (Article 117).
Regulatory Authority	Bank of Algeria, Financial Regulation Commission.
Key Legislation	Finance Law of 2018, Law on Money and Credit, AML/CTF Law No. 05-01.
Penalties for Violation	Fines, imprisonment, and asset confiscation.
Popular Exchanges	None; illegal to operate or use exchanges like Binance or Coinbase.
DeFi Market	Nonexistent due to cryptocurrency ban; informal participation is illegal.
NFT Market	Nonexistent; NFT transactions are illegal as they involve cryptocurrencies.
Informal Exchange Methods	P2P trading, VPN-based access to foreign platforms, physical meetups.

Understanding Algeria's Crypto Ban: Useful Resources

• Ban on Cryptocurrencies: The 2018 Finance Law prohibits all cryptocurrency transactions, including buying, selling, holding, or using.
• Reason for Ban: The government cites risks of money laundering, terrorism financing, and threats to financial stability.
• No Legal Cryptocurrency Exchanges: Formal exchanges are absent, and using foreign platforms is illegal.
• Risks of Informal Trading: P2P trading or VPN-based exchange access may result in fines, scams, or financial loss.
• DeFi and NFT Limitations: The cryptocurrency ban extends to DeFi and NFT activities, preventing legal participation.
• Regulatory Review: As of May 2025, no plans exist to lift the ban or regulate digital assets.
• Global Context: Algeria’s strict stance aligns with countries like Egypt, where cryptocurrencies are also illegal, contrasting with nations exploring blockchain regulation.

Conclusion

Algeria maintains a stringent policy against cryptocurrencies, DeFi, and NFTs, driven by concerns over financial integrity, fraud, and consumer protection. The 2018 Finance Law, alongside banking and AML/CTF regulations, enforces a comprehensive ban on virtual currencies, eliminating opportunities for a legal market. The absence of regulated exchanges and the risks of underground trading marginalize cryptocurrency activities in the country. DeFi and NFT markets, reliant on cryptocurrencies, remain inaccessible, stifling innovation. While some individuals engage in illicit transactions, the legal and financial risks are significant. As global attitudes toward cryptocurrencies evolve, Algeria may face pressure to reconsider its policies, but as of May 2025, it remains one of the most restrictive environments for digital assets.