Instruction 06-2025: Algeria’s PSP Framework Gives Fintech Its First Legal Playbook

Why This Regulation Changes Everything for Algerian Fintech

For years, Algeria’s fintech sector operated in a regulatory void. Digital wallet providers navigated without clear licensing rules while neighboring Morocco, Tunisia, and Egypt built structured fintech markets. Algeria — with 48 million people, a GDP of $288 billion, and a 58% unbanked adult population — sat on an enormous untapped opportunity with no formal path for non-bank payment service providers.

That changed on August 17, 2025, when the Bank of Algeria (Banque d’Algerie) published Instruction 06-2025, the country’s first dedicated PSP regulatory framework. Built on Regulation 25-02 (April 2025) under the Monetary and Banking Law (Law 23-09, June 2023), the instruction creates a complete licensing playbook: capital requirements, wallet tier limits, agent network rules, consumer protection standards, and AML/CFT compliance obligations.

For fintech founders, the message is clear. The era of operating in gray zones is over. There is now a defined path to legal operation — but it comes with high barriers and strict constraints.

Licensing Requirements and Corporate Structure

Instruction 06-2025 restricts PSP licenses to corporate entities — specifically, companies organized as a Societe par Actions (SPA) or Societe a Responsabilite Limitee (SARL). Individual entrepreneurs and sole proprietorships cannot apply. The PSP’s head office, payment platform, and all infrastructure must be located in Algeria.

The minimum capital requirement is 160 million DZD, approximately $1.2 million at the official exchange rate. This capital must be fully paid up before submitting the approval application. At this threshold, only well-capitalized startups, telecom operators, established banks, and companies with serious investor backing can realistically enter the market.

The application process requires a technical and economic study, descriptions of payment services to be offered, information system architecture, data protection measures, AML/CFT compliance procedures, and details on human and material resources. Background checks on shareholders, directors, and key personnel are mandatory.

Three-Tier Digital Wallet System

One of the regulation’s most significant innovations is a graduated wallet system that balances financial inclusion with risk management through escalating KYC requirements.

Tier 1 (Basic): Maximum balance of 100,000 DZD (~$740). Requires basic identification only — name, phone number. Designed for financial inclusion, giving access to individuals who may lack extensive documentation.

Tier 2 (Standard): Maximum balance of 500,000 DZD (~$3,700). Requires proof of income and official government ID. This tier covers everyday payments, merchant transactions, and salary reception.

Tier 3 (Premium): Maximum balance of 1,000,000 DZD (~$7,400). Requires enhanced due diligence including a video interview. Targets small business owners, active merchants, and higher-value transaction needs.

This graduated approach mirrors proven models in other markets. The low-barrier Tier 1 entry point opens digital payments to Algeria’s large unbanked population while escalating controls satisfy FATF anti-money laundering standards that Algeria, as a MENAFATF member, is committed to meeting.

Agent Networks and Consumer Protection

The regulation authorizes PSPs to establish agent networks — physical locations such as retail shops, post offices, pharmacies, and dedicated points where customers can deposit and withdraw cash from digital wallets. Algeria has approximately 1,600 bank branches for 48 million people (roughly one per 30,000 citizens). Agent networks convert existing retail infrastructure into financial access points, a model that has driven financial inclusion across Africa.

PSPs bear full responsibility for agent selection, training, monitoring, and AML compliance. This is not an optional add-on — it is a core regulatory obligation.

On consumer protection, the framework includes several critical safeguards. PSPs must deposit all customer funds into segregated escrow accounts (“comptes de cantonnement”) held at commercial banks, with balances matched daily. PSPs must secure bank guarantees or professional liability insurance. Strong customer authentication is mandatory for high-risk transactions. Users are entitled to receipts for every transaction and free access to their balance and transaction history.

Dinar-Only Mandate and Cryptocurrency Prohibition

All PSP transactions must be denominated and settled exclusively in Algerian dinars. No foreign currency wallets, no cross-border remittances, no multi-currency functionality. This reflects Algeria’s capital control framework and the Bank of Algeria’s monetary sovereignty priorities. For the large Algerian diaspora in France, Canada, and the Gulf, remittance services remain outside the PSP framework.

The regulation explicitly prohibits any cryptocurrency or stablecoin transactions through PSP platforms. This aligns with Algeria’s broader crypto stance, which escalated significantly with Law 25-10 (July 24, 2025), criminalizing all crypto activities — including possession, trading, mining, and exchange operation — with penalties of two months to one year in prison and fines of 200,000 to 1,000,000 DZD. For fintech founders, the boundary is absolute: the Algerian PSP market is dinar-only and firmly within the traditional monetary system.

The Regulatory Trifecta Shaping Algerian Fintech

Instruction 06-2025 is part of a broader regulatory architecture that Algeria assembled in 2025:

1. Law 25-11 (July 2025): Modernized data protection — mandatory DPOs, five-day breach notification to ANPDP, and Data Protection Impact Assessments for high-risk processing. PSPs handling customer financial data must comply.
2. Instruction 06-2025 (August 2025): The PSP framework analyzed in this article.
3. Trust Services Draft Law (approved by Council of Ministers, November 2025): Defines rules for digital identification, electronic signatures, seals, and timestamps. Once enacted, it would enable remote KYC onboarding for PSP wallet applications.

Together, these frameworks create a coherent — if still incomplete — regulatory foundation for Algeria’s digital economy. The trust services law enables digital identity verification feeding into the PSP’s tiered KYC, all under the data protection umbrella of Law 25-11.

Who Moves First and Who Waits

The likely first licensees are telecom operators (Djezzy, Mobilis, Ooredoo), established financial institutions (Algerie Poste, CPA, BNA), and well-funded fintechs like Yassir and Slick Pay. These entities have the capital, customer bases, and distribution networks to meet the 160 million DZD threshold and build compliant operations.

Bootstrap startups face a stark reality: $1.2 million in capital is a high barrier. They will need to raise specifically for licensing or partner with licensed entities. Algeria’s August 2025 accession to PAPSS (the Pan-African Payment and Settlement System) as the 18th member signals future cross-border ambitions, but for now, the PSP framework is domestic-only.

The combination of high capital requirements and a 48-million-person, cash-dominant market is likely to produce a concentrated market — a small number of well-capitalized PSPs competing for an enormous user base.

Sources & Further Reading

• Algeria Launches First Fintech Regulation for PSPs — Startup Researcher
• Algeria Opens for Fintech: New PSP Rules Create a Playbook for Payments Startups — LaunchBase Africa
• Regulation 25-02: Conditions for PSP Authorization — Bank of Algeria (PDF)
• Installation of Payment Service Providers: Bank of Algeria Sets Conditions — Algeria Invest
• AML Compliance in Algeria: A 2025 Guide — VoVeID
• Algeria Joins Pan-African Payment System — Fintech News Africa
• Algeria’s Fintech Ecosystem in 2026 — The Fintech Times