Egypt’s resistance to accepting crypto assets

Egypt has maintained a rather restrictive stance on cryptocurrencies. The Central Bank of Egypt (CBE) and the Egyptian government have warned against the trading and usage of cryptocurrencies like Bitcoin, citing reasons such as potential involvement in illicit activities, financial loss due to high volatility, and lack of regulation.

The details regarding how Egypt has been regulating cryptocurrencies can be put as these:

  1. Ban on Cryptocurrency Transactions: The Egyptian government, through the CBE, has effectively banned banks from processing transactions that involve cryptocurrencies. This means that financial institutions are not allowed to offer services that facilitate trading or usage of bitcoin and other digital currencies.
  2. Religious Decree Against Trading: In addition to the regulatory measures, Egypt’s Islamic religious authority, Dar al-Ifta, issued a religious decree (fatwa) in January 2018 stating that trading in cryptocurrencies is forbidden under Islamic law. This can be influential in a predominantly Muslim country like Egypt, as it adds a religious implication to the act of dealing with cryptocurrencies.
  3. Regulatory Environment: There has been some movement towards establishing a regulatory environment for fintech that might include some cryptographically enhanced financial products, but not explicitly for decentralized cryptocurrencies. In September 2020, the CBE announced a draft banking law to empower its control over the cryptocurrency market, potentially paving the way for regulating blockchain-based electronic payments.
  4. Anti-Cyber and Information Technology Crimes Law: This law provides the legal framework for combatting cybercrimes in Egypt and includes clauses that could be interpreted to apply to illicit activities involving cryptocurrencies.
  5. Washing Money Control Law: This law was updated in 2020 with wider definitions of money laundering activities which could cover crypto-assets if they were used for illegal purposes.
  6. Electronic Payments Act: While this act encourages electronic payments, it does not specifically address or enable cryptocurrency dealings but could potentially serve as a basis for future crypto-regulation.

Despite these restrictions, there is still news about peer-to-peer cryptocurrency trading happening within Egypt’s borders. Traders may use VPNs and other methods to access international platforms that do not have physical presences in Egypt, operating in a sort of gray area.

It is also worth noting that regulations can change rapidly, so it is essential for anyone interested in cryptocurrencies within Egypt to stay up-to-date with the latest legal developments directly from official sources or through consultation with legal experts specialized in Egyptian laws regarding financial technology and digital assets.

Platforms like KuCoin would potentially operate in a challenging regulatory environment. The kucoin referral code is often used in several countries, but some people are having difficulties in using it on Egypt. Due to the Central Bank of Egypt’s stance, financial institutions within Egypt were not allowed to facilitate transactions related to cryptocurrencies, which would include exchanges like KuCoin.

However, like with other international cryptocurrency exchanges, individual traders in Egypt who wish to use services like KuCoin might find ways to do so using non-Egyptian banking channels or peer-to-peer (P2P) methods to conduct trades. This might involve using other ways to access the exchange and relying on alternative methods of funding their accounts that do not directly involve Egyptian banks.

It’s crucial to bear in mind that any individual using international exchanges from within Egypt should be aware of the risks involved, including potential legal repercussions, financial loss due to high volatility of cryptocurrencies, security risks, and possible penalties for violating local regulations or banking rules.

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