Egypt: Central Bank of Egypt to Ban Unlicensed Cryptocurrency Businesses

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According to a report by Egypt Independent published on May 28, 2019, a new banking law drafted for the Central Bank of Egypt (CBE) would make it illegal to form or operate a crypto-based business without obtaining the mandatory licenses in advance.

Egypt Shows its Crypto-Averse Stance

If an official source close to the Egyptian Middle East News Agency (MENA) is to be believed, the country could soon tighten its grip around decentralized cryptocurrencies like bitcoin (BTC), ether (ETH), and others.

The source told Egypt Independent that should the draft bill be passed, the barriers to entry into Egypt’s cryptocurrency ecosystem could increase significantly. The bill would make it compulsory for crypto-based startups to obtain several licenses from authorities if they are to operate in the nascent industry.

The source added that the bill would give powers to the CBE’s Board of Directors to enact laws regarding the trading and handling of cryptocurrencies, which could further jeopardize their fate in the country.

Historically, Egypt could be put in the camp of countries that have displayed their distaste for cryptocurrencies. BTCManager reported on January 3, 2018, how the Grand Mufti of Egypt had hinted at placing a complete ban on cryptocurrencies fearing that they could be used to fund terrorist activities.

Positive Outlook on Blockchain Technology

Contrary to its hostile tone towards digital currencies, the draft bill sounds receptive to fintech. The document highlights the importance of emerging technologies in reshaping the traditional financial and banking services sectors.

This should hardly come as a surprise as, to date, Egypt has taken numerous initiatives to leverage emerging technologies to benefit its banks and other financial institutions.

As reported by BTCManager on April 29, 2018, the National Bank of Egypt (NBE) had joined the R3 Blockchain Consortium to keep pace with the rapid pace of technological advancement for the betterment of the long-untouched financial industry.

The source added that the draft bill provides legal authority to electronic banking transactions assuming the CBE issues rules pertaining to them. The report reads in part:

The new law provides legal authority for the electronic authentication of bank transactions, electronic payment orders, and transfer orders as well as for the electronic settlement of checks and the issuance and circulation of electronic checks and electronic discount orders, provided that Board of Directors of CBE issue rules and procedures regulating all the aforementioned actions.

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