Egypt embodies an extremely interesting paradox in the global landscape of digital currencies. On the one hand, the government has adopted a very rigid stance toward cryptocurrency trading, while on the other, public interest in digital assets does not seem to subside. This article discusses the stance of cryptocurrency in Egypt the fine balance between regulation and demand at work in this country, taking into account the attempt of the nation to reconcile financial stability with technological innovation.
The case of Egypt thus becomes very interesting when it comes to the cryptocurrency market. Even as the government is treading very cautiously, interest in digital assets does not seem to fade. In 2018, the Egyptian government announced the ban on cryptocurrency trading due to Islamic law. But this has cut no ice on the craze for these crypto assets. International cryptocurrency platforms continued to see huge user growth in Egypt indicating a wide chasm between public interest and the official regulations in force.
It is in this regard that the role of the Central Bank of Egypt becomes very key to the regulatory landscape. In the fight towards the digital transformation of the financial sector, Law No. 194 of 2020 instituted digital tools like e-money and FinTech. In contrast, the very same law clearly forbids any activities in relation to cryptocurrencies, such as issuance, trading, or promotion, under Article 206.
That clearly delineates the tightrope which Egypt is walking with regard to desires for fintech innovation, while avoiding possible cryptocurrency pitfalls.
Despite this ban, certain oversight bodies are currently exploring opportunities in blockchain. Even as the CBE is highly conservative about cryptocurrencies, it may still be willing to consider other uses of blockchain. In addition, professional associations like the Egyptian CFA Society and the Egyptian FinTech Association are integral parts of the financial environment in Egypt, playing the role of policing and enforcement within the financial sector.
While direct investment in the cryptocurrency market remains forbidden, its broader tech ecosystem is booming. In 2024, it was declared that Sawari Ventures had launched a $150 million fund to back up the startups of Egypt in areas like FinTech. Probably, all this interest in innovation within the financial sector has been gathering momentum and will bring progressive development into the sphere of cryptocurrency.
The 2022 funding that blockchain startup Pravica received for its secure messaging services is a direction forward that may be taken. While it does not directly link with cryptocurrency trading, it does prove the growing interest in the application of blockchains for security and privacy.
Yet, a gray market for cryptocurrencies thrives in Egypt. Information concerning these entities is scant since they are unofficial, although some names have emerged like Bybit, Binance, and OKX. Engaging with these platforms comes, therefore, associated with risks, as these are outside the scope of the regulatory framework.
The cryptocurrency market in Egypt is expected to reach US$7 million in 2028 from US$5 million in 2023 at a CAGR of 8.83%. Egypt's stance on cryptocurrencies is changing. On one hand, there is a ban against trading; on the other, the government is also driving into digital transformation and innovative financial technologies. Tech investments in the broader ecosystem, coupled with blockchain startups, point toward a possible drift toward embracing parts of the cryptocurrency revolution. It will be based on the ability of cryptocurrencies to coexist with innovation and regulation in a safe and secure financial activity environment.