Is Egypt crypto-friendly?
Under Islamic Law and by religious decree, cryptocurrencies in Egypt are prohibited. The Central Bank of Egypt (CBE) warns against cryptocurrency activities. In 2019, in what seemed to be a change in stance at the time, the CBE announced it was working on a law that would ban the creation, trading or promotion of cryptocurrency without a license. In 2020, the bank subsequently added Law No. 194, covered briefly below.
However, according to data on Egypt’s crypto market from Triple-A, it’s estimated that over 3 million people in Egypt own cryptocurrency. Cryptocurrency exchanges, like Binance, are available in Egypt and allow Know Your Customer (KYC)-compliant users to buy and sell cryptocurrencies using the Egyptian pound (EGP) and other fiat currencies. Triple-A is a licensed cryptocurrency payment gateway that facilitates the seamless integration of cryptocurrency transactions for businesses worldwide.
What cryptocurrency laws are applicable in Egypt?
In 2018, Egypt’s Dar al-Ifta, its primary Islamic legislator, issued a religious decree classifying transactions in Bitcoin (BTC) as haram and, therefore, prohibited under Islamic law, according to an article by Freeman Law covering Egyptian Bitcoin regulations that adds:
“It should be noted that the declaration of cryptocurrencies being haram is fatwā, meaning that while the religious decree is a legal opinion, it is non-binding.”
The law firm goes on to describe the CBE warning of 2018 against trading cryptocurrencies such as Bitcoin due to the high risks associated with crypto. The bank also stated that commerce within Egypt is confined to the official paper currencies it approves.
By May 2019, the CBE revealed it was working on a draft law that would only ban the creation, trading or promotion of cryptocurrencies without a license. The move appeared to mark the first step on a potential path in Egypt toward the legalization of activities related to cryptocurrencies.
However, there is no evidence that the law has passed. Therefore, due to the lack of official rules and the CBE’s negative stance, using cryptocurrencies in Egypt carries substantial ambiguity and potential risk, even though it is not illegal outright.
In 2020, Law No. 194 was implemented, and in September 2022, the CBE issued a new warning after “monitoring of cryptocurrency trading through some regional and international platforms,” which it said had been “remarkably campaigned recently.”
The central bank renewed its warning against “dealing with all types of encrypted virtual currencies” for the risks, including “high fluctuations, significant price volatility” and “use in financial crimes and electronic piracy.”
The CBE also referenced the banking sector Law No. 194 of the year 2020, which prohibits “issuing, trading, or promoting cryptocurrency,” as well as creating or operating “trading platforms” and “carrying out any related activities.”
Violations of this law can lead to imprisonment and substantial fines, the bank warns. The bank also iterated that trading is limited to official currencies and called on traders “within the Egyptian market” not to engage in “trading in these high-risk currencies.”
Do cryptocurrency exchanges operate in Egypt?
Buying Bitcoin with Egyptian pounds, other currencies and credit/debit cards in Egypt is possible on several exchanges that operate transparently in the country. Binance and Gemini, for example, both clearly state on their respective websites the availability of cryptocurrency exchanges in Egypt.
How to buy Bitcoin in Egypt
Buying Bitcoin in Egypt starts with ensuring applicable laws and regulations are followed and remembering that these can change at any time. Governments and legislators, including in Egypt, are still evolving their responses to the new world of digital currencies.
Buyers of Bitcoin will choose an exchange, register and create an account, and then fund their account to make a crypto purchase. But are there Bitcoin ATMs in Egypt? There are no Bitcoin ATMs in Egypt as of April 2024.
A step-by-step guide to buying Bitcoin in Egypt
Egypt does not have a specific law banning Bitcoin or cryptocurrency ownership. Bitcoin is usually available on the major cryptocurrency exchanges that operate in Egypt. The following is a summary of the common steps involved in buying Bitcoin on a popular exchange, but the process may vary from exchange to exchange.
Step 1: Choose an exchange
Security is of utmost priority when choosing an exchange. Bitcoin buyers will research the reputation and sentiment toward the exchange and check its online reviews. Then, they will check the cryptocurrencies listed and available to purchase and the fiat currencies, like the Egyptian pound, that are accepted. They will also ensure they understand the fees charged by the exchange.
Step 2: Register with an exchange
Registering with an exchange requires an email, a password and the setup of any other security authentication available. Exchange users will want to take advantage of the maximum security options offered to make their experience as safe as possible.
New crypto exchange users will usually need to provide the exchange with an image of a piece of photo ID to complete the KYC process.
Step 3: Fund your account and buy Bitcoin
Once a cryptocurrency exchange account has been opened, funds can be added from fiat bank accounts or credit cards where accepted. Once purchaser funds are available on an account, it’s possible to buy BTC with EGP on an exchange that offers this trading pair.
Buying Bitcoin with credit/debit cards in Egypt
Egyptian fiat-to-crypto exchanges — i.e., most major centralized cryptocurrency exchanges operating in Egypt — will usually accept credit or debit cards. Each reputable exchange will be transparent about the types of fiat currency and payment methods welcomed, and this can be clarified on the exchange’s website before opening an account.
How to choose crypto wallets in Egypt
Online cryptocurrency wallets, like MetaMask and Trust Wallet, are available to users all over the world. Equally, it’s possible to purchase hardware wallets, like Ledger and Trezor devices, online from any location.
To choose a crypto wallet, investors first research its reputation and security and check if it is compatible with Bitcoin and any other cryptocurrencies they plan to purchase. Cryptocurrency users will also make sure a wallet has any additional features they are looking for, such as access to decentralized finance (DeFi) projects and nonfungible token (NFT) compatibility.
It’s possible to store Bitcoin and other cryptocurrencies on an exchange, but this is generally considered the least safe option. Online or hot wallets are safer than exchanges; however, the safest option for long-term storage of Bitcoin and other cryptocurrencies is to use a hardware wallet.
The future of crypto regulations in Egypt
Although the future of crypto laws in Egypt remains uncertain, existing trends indicate that the regulatory environment will become more institutionalized. The Egyptian Central Bank’s ongoing admonitions over cryptocurrencies indicate a preference for stringent regulations.
The 2020 draft legislation shows a trend away from outright prohibition and toward regulatory control, giving the Financial Regulatory Authority the authority to monitor crypto operations.
Regulating the cryptocurrency market could streamline and legitimize it, but it could also restrict financial flows, exchanges and trade. Anyone interested in the Egyptian cryptocurrency markets should watch the latest legislative changes and official declarations from the CBE.
Written by Marcel Deer