Egypt

Disclaimer: The regulatory information provided below is for general informational purposes only and may not reflect the most current legal developments. Cryptocurrency regulations are rapidly evolving and can change frequently. This information should not be considered legal or tax advice. Before making any business or investment decisions, please consult with qualified legal, tax, or financial professionals familiar with your specific jurisdiction and circumstances. Always verify current regulations with official government sources and regulatory bodies.

Legal Classification & Regulatory Framework

Cryptocurrency Status

Egypt maintains one of the most restrictive stances toward cryptocurrency globally. Under the Central Bank and Banking System Law No. 194 of 2020, specifically Article 206, all cryptocurrency-related activities are effectively prohibited without prior approval from the Central Bank of Egypt (CBE). This includes the issuance, trading, promotion, or operation of any platform dealing with crypto assets or “cryptographic units” as defined under Egyptian law.

The CBE has never issued any licenses for cryptocurrency activities since the law’s enactment, creating a de facto total ban on cryptocurrency operations within the country. Cryptocurrencies are not recognized as legal tender, currency, or regulated financial instruments in Egypt. The government treats digital assets as neither official currency nor recognized personal property for legal purposes.

Egypt’s restrictive approach is influenced by multiple factors beyond financial regulation. In 2018, the Dar al-Ifta, Egypt’s official Islamic legislative authority, issued a religious decree (fatwa) classifying Bitcoin and other cryptocurrency transactions as “haram” (forbidden under Islamic law). While this fatwa is non-binding from a legal standpoint, it significantly shaped public perception and reinforced the government’s prohibitive stance. The ruling cited the speculative nature of cryptocurrencies and their potential for fraud as conflicting with Islamic finance principles.

Violations of Article 206 carry severe consequences, including imprisonment and substantial fines ranging from EGP 1 million to EGP 10 million. Authorities may also confiscate cryptocurrencies, mining equipment, and related assets, while platforms facilitating crypto transactions face blocking and legal action.

Tax Treatment

Due to the prohibited status of cryptocurrency in Egypt, there is no formal taxation framework for digital assets. The Egyptian Tax Authority (ETA) does not currently collect taxes on cryptocurrency holdings, transactions, or gains because such activities are not legally recognized.

Since cryptocurrency earnings are not acknowledged under Egyptian law, there is no official process for declaring them for tax purposes. No specific forms or procedures exist for reporting cryptocurrency income to the ETA. This creates a legal grey area where individuals who engage in cryptocurrency activities face prosecution for financial crimes rather than tax-related offenses.

Capital gains tax, income tax, and other tax categories that typically apply to investment activities in other jurisdictions do not formally apply to cryptocurrency in Egypt. However, this lack of taxation does not provide legal protection—rather, it reflects the government’s position that such activities should not exist in the first place. Any profits derived from cryptocurrency trading could potentially be subject to asset seizure and criminal penalties rather than tax obligations.

Should Egypt legalize cryptocurrency in the future, tax treatment would likely need to be established through new legislation. Egyptian authorities have been monitoring global approaches to cryptocurrency taxation, though no official timeline or framework has been announced for potential domestic implementation.

Regulatory Oversight

The Central Bank of Egypt (CBE) serves as the primary regulatory authority overseeing cryptocurrency policy in Egypt. The CBE enforces Law No. 194 of 2020 and has issued multiple public warnings against dealing in digital currencies, emphasizing the high risks associated with cryptocurrency trading, including extreme price volatility, potential for fraud, and use in financial crimes.

The CBE’s warnings, issued repeatedly over the years, stress that cryptocurrencies are not issued by any official authority and lack legal backing. The central bank has made clear that any financial losses incurred through cryptocurrency trading are not recoverable under Egyptian law, and users have no legal recourse or protection.

The Financial Regulatory Authority (FRA) oversees non-banking financial activities in Egypt, including fintech services. While the FRA is not currently involved in cryptocurrency oversight specifically, it has been mentioned as a body that may potentially be given future authority to monitor crypto operations should Egypt’s legal framework evolve.

Other relevant regulatory bodies include the National Telecommunications Regulatory Authority (NTRA), which regulates telecommunications services, and the National Payments Council, which was established to reduce cash usage and promote electronic payment methods. The Egyptian Tax Authority maintains jurisdiction over tax matters, though cryptocurrency currently falls outside its purview due to the prohibition on such activities.

Business Environment

Banking Relationships

Traditional banks in Egypt are prohibited from facilitating any cryptocurrency-related transactions. Financial institutions are bound by CBE directives that prohibit involvement with digital asset trading, custody, or related services. Banks cannot open accounts for cryptocurrency businesses, process crypto-related payments, or provide services to entities engaged in digital asset activities.

This strict prohibition extends to both domestic and international transactions. Egyptian banks are required to monitor and report suspicious activities that may involve cryptocurrency, and the CBE has implemented measures to track and prevent crypto-related financial flows through the traditional banking system.

The banking restrictions create significant operational challenges for any business attempting to work with digital assets in Egypt. Companies are forced to rely entirely on traditional banking channels for all financial activities, which are typically slower and more expensive for cross-border payments. This isolation from cryptocurrency payment rails can put Egyptian businesses at a disadvantage when working with international partners who prefer digital currency settlements.

Despite these restrictions, Egypt has a growing digital banking and fintech sector focused on traditional financial services. The CBE has issued regulations for digital banks and mobile payment services, demonstrating openness to financial innovation within regulated parameters—as long as cryptocurrency is not involved.

Licensing Requirements

Under current Egyptian law, any cryptocurrency-related activity requires prior approval from the Central Bank of Egypt. However, since the CBE has not issued any licenses or published a clear framework for the licensing process, this requirement effectively creates a complete prohibition on cryptocurrency businesses operating in Egypt.

There is no pathway currently available for cryptocurrency exchanges, wallet providers, custody services, or other crypto-related businesses to obtain legal authorization to operate within Egypt. Any entity attempting to conduct such activities without CBE approval faces severe criminal penalties.

For fintech companies operating in other areas, the regulatory landscape is more developed. The Financial Technology Law No. 5 of 2022 establishes a framework for fintech services in non-banking financial activities, with the FRA overseeing licensing and compliance. Companies can obtain various licenses depending on their activities, including permits for digital platforms, blockchain technology use (for non-crypto applications), and electronic financial services.

The FRA has issued regulations governing the use of distributed ledger technology (DLT), including blockchain, for purposes such as e-registration, e-signatures, and smart contracts in the non-banking financial services sector. These regulations require prior FRA approval and adherence to specific criteria for licensing and operation. However, these provisions explicitly exclude cryptocurrency-related applications.

Innovation Support

Egypt has demonstrated support for fintech innovation through several regulatory initiatives, though these explicitly exclude cryptocurrency. Two regulatory sandboxes have been established to foster innovation in the financial technology sector.

The CBE launched its banking fintech sandbox in 2019, providing a controlled environment for fintech companies to test innovative business models facing regulatory uncertainties. This virtual space allows applicants to experiment with solutions for a limited period under defined parameters. The sandbox aims to integrate compliance into the fintech ecosystem at early stages while enabling innovators to refine their offerings.

The FRA has established a separate sandbox for non-banking financial services, allowing startups to obtain temporary two-year licenses with less stringent requirements than established market players. These initiatives have helped Egypt develop one of the largest fintech ecosystems in the MENA region.

Blockchain technology, separate from cryptocurrency applications, has seen some acceptance in Egypt. The FRA’s regulations recognize and permit blockchain use for e-registration, e-signatures, and certain smart contract applications in the non-banking financial services sector. There are indications that authorities are permitting blockchain solutions in sectors such as carbon markets, trade, and logistics, suggesting interest in specific practical applications of the technology.

The government has also announced work on a Central Bank Digital Currency (CBDC), referred to as the e-Pound, with a target launch around 2030. This initiative suggests interest in digital currency technology under central bank control, though it represents a different approach from decentralized cryptocurrencies.

Market Characteristics

Adoption Patterns

Despite the legal prohibition, cryptocurrency ownership persists among Egyptian citizens. Research estimates suggest that several million Egyptians hold cryptocurrency, representing a notable portion of the population given the strict regulatory environment. This adoption has occurred primarily through peer-to-peer platforms and international exchanges that continue to serve Egyptian users.

Interest in cryptocurrency has been driven partly by Egypt’s economic challenges, including currency devaluation and inflation. When the Egyptian pound was floated in 2024, leading to significant depreciation, some individuals sought cryptocurrency as an alternative store of value or hedge against domestic economic instability. High inflation rates have contributed to this trend, as citizens look for ways to protect their wealth.

Adoption patterns show particular interest among younger, tech-savvy demographics attracted to global trends in digital finance. Media coverage of cryptocurrency in Egypt is mixed, with some outlets expressing caution while others demonstrate curiosity about the technology. However, business acceptance remains virtually non-existent—banks, retailers, and companies do not accept cryptocurrency payments, and businesses are actively discouraged from engaging with blockchain-based payments.

Egypt ranks among the top global recipients of remittances, which support a significant portion of GDP. The high cost of traditional remittance channels has created interest in cryptocurrency as a potential alternative, though legal restrictions prevent formal adoption of this use case.

Industry Focus

Given the prohibition on cryptocurrency activities, Egypt lacks a domestic crypto industry. No cryptocurrency exchanges, mining operations, or crypto-focused businesses operate legally within the country. The local industry that exists operates in a legal grey area, primarily serving users through international platforms.

Egypt’s broader fintech sector, however, has shown substantial growth in areas unrelated to cryptocurrency. Key verticals include digital payments and remittances, lending and alternative finance, digital banking, and investment platforms. Several Egyptian fintech companies have received recognition among the top fintech companies in the Middle East, and the country has attracted significant venture capital investment in the sector.

The National Bank of Egypt has explored partnerships with blockchain-based companies for remittance services, though these arrangements involve the underlying technology rather than cryptocurrency itself. Such initiatives demonstrate potential interest in blockchain applications that could facilitate cheaper, faster cross-border payments within a regulated framework.

For businesses and investors interested in the cryptocurrency space, Egypt’s restrictions mean that opportunities must be pursued through other jurisdictions. Neighboring countries in the Gulf Cooperation Council region, particularly the United Arab Emirates, offer more favorable regulatory environments for cryptocurrency activities and have attracted Egyptian entrepreneurs and investors seeking to participate in the digital asset economy.

Regulatory Evolution

Egypt’s cryptocurrency regulations have remained consistently restrictive since the enactment of Law No. 194 of 2020. The CBE has continued to issue warnings against cryptocurrency trading, with statements released periodically to remind the public of the legal prohibitions and associated risks.

Some observers have noted potential for future regulatory evolution. Early discussions around the 2020 law included the possibility of establishing a licensing framework that could allow regulated cryptocurrency activities. The law technically provides for the possibility of CBE approval, suggesting the door is not completely closed to future legalization under controlled circumstances.

Egyptian authorities have been monitoring global approaches to cryptocurrency regulation, including standards set by international organizations such as the Financial Action Task Force (FATF) and the International Monetary Fund (IMF). However, any potential shift toward legalization would require significant legislative changes and a reversal of the CBE’s current policy position.

The development of the e-Pound CBDC project may influence future policy discussions. If Egypt successfully implements a central bank digital currency, it could potentially create a framework for understanding and regulating digital value transfer that might eventually accommodate private cryptocurrencies in some form.

Regional trends may also influence Egypt’s approach. As other MENA countries develop more comprehensive cryptocurrency regulations, Egypt may face pressure to reconsider its position to remain competitive in attracting fintech investment and talent. However, given concerns about monetary stability, capital flight, religious considerations, and financial crime prevention, substantial policy changes appear unlikely in the near term.

For Current Information:

• Central Bank of Egypt (CBE): https://www.cbe.org.eg
• Financial Regulatory Authority (FRA): https://www.fra.gov.eg
• Egyptian Tax Authority: https://www.eta.gov.eg
• Ministry of Finance: https://www.mof.gov.eg