Egypt Cracks Down on Cryptocurrency: From Haram to Licensed Activity

In a significant shift, Egypt’s stance on cryptocurrency has transformed from declaring it haram to permitting its use under strict regulations.

A Brief History of Egypt’s Stance on Cryptocurrency

• In 2018, the Central Bank of Egypt (CBE) warned against trading cryptocurrencies like Bitcoin due to the high risk associated with such currencies.
• However, in 2019, the CBE announced plans to draft a law that would only ban the creation, trading, or promotion of cryptocurrencies without a license.

The New Regulatory Environment

Fast forward to 2020, and Egypt’s Parliament enacted the Central Bank and Banking Sector Law No.194, which introduced digital means to aid in the transformation of the banking and financial sector. This law:

• Introduced definitions and licensing instructions for “Digital Banks”
• Paved the way for licensed cryptocurrency activities
• Set forth a clear regulatory framework for the country

Crypto Mining: A Growing Concern

While some jurisdictions remain unclear about the legality of crypto mining, Egypt’s regulatory environment has become more defined. The Financial Crimes Enforcement Network (FinCEN) considers crypto miners to be money transmitters, subjecting them to specific laws.

What This Means for Investors and Businesses

Egypt’s approach serves as a prime example of how countries are navigating the complex legal issues surrounding digital currencies. If you’re considering investing in or using cryptocurrencies, it’s essential to understand the regulatory environment and potential risks involved.

At Freeman Law, we provide guidance on cryptocurrency law and can assist with tax planning, compliance, and regulatory concerns. Contact us today to schedule a consultation or discuss your cryptocurrency and blockchain technology questions at (214) 984-3410.