Egypt and Cryptocurrency
Egypt Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
In 2018, Egypt’s Dar al-Ifta, the primary Islamic legislator in Egypt, issued a religious decree classifying commercial transactions in bitcoin as haram (prohibited under Islamic law). Dar al-Ifta has stated that cryptocurrencies could damage national security and central financial systems, and could also be used to fund terrorism and terrorist activities.[1] 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 Central Bank of Egypt (“CBE”) then issued a warning in January 2018 against the trading of cryptocurrencies, such as bitcoin, due to the extremely high risk associated with such currencies. The Central Bank also asserted that commerce within the Arab Republic of Egypt is confined only to the official paper currencies approved by the Bank.[2]
In 2019, however, the CBE announced that it was working on a draft law that would only ban the creation, trading, or promotion of cryptocurrencies without a license.[3] The statement revealed the CBE’s changing outlook on digital currencies and cryptocurrencies in particular.
In 2020, the Egyptian Parliament enacted the Central Bank and Banking Sector Law No.194 of the year 2020.[4] Law No.194 introduced several technological and digital means to aid with the digital transformation of the banking and financial sector in Egypt. These means include the digital finance, digital settlement of cheques, E-Money, cryptocurrency, FinTech and RegTech. The new CBE Law also set forth definitions and licensing instructions with regards to ‘Digital Banks’.
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
Is cryptocurrency legal in Egypt?
Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now to schedule a consultation, or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.
[1] Press Release, Central Bank of Egypt, A Warning Statement (Jan. 10, 2018), page archived at Perma.cc.
[2] Religious Decree No. 4205, The Status of Transactions in Bitcoins and other Cryptocurrencies under Islamic Law, Egypt’s Dar al-Ifta (Dec. 28, 2017).
[3] CBE to ban issuance of cryptocurrency without licenses, Egypt Independent (May 28, 2019).
[4] Digitalisation and technological transformation in Egypt’s banking and payment sector in Egypt, Global Banking Regulation Review, by Ms. Rehan Elbashary, Shahid Law Firm, (October 5, 2020).
