Bitcoin and cryptocurrencies were not broadly discussed up until 2015, when Yellow startup launched the Bitcoin voucher service.
The Egyptian authorities shifted their focus to cryptocurrencies in 2017, after rumors began to circulate that Egyptian banks would be allowed to work with cryptocurrencies. The Central Bank of Egypt, however, immediately denied those rumors.
In January 2018, Shawki Allam, Grand Mufti of Egypt, issued a fatwa prohibiting trade in cryptocurrencies. The mufti claimed it was banned by Islam and is therefore haram (a sin).
Also in January 2018, a warning was issued by the Central Bank of Egypt against cryptocurrency trading due to the high risks associated with digital currency trading.
At the end of May 2019, the Egyptian authorities were reported to have started developing a draft law on the regulation of cryptocurrency-related activities.
Neutral Political Environment
Overall, Egyptian regulators are rather skeptical about new technologies and digital currencies, emphasizing the threats and risks of cryptocurrencies, and stressing that cryptocurrencies are not legal in Egypt. The situation in Egypt is further complicated by the fact that there are many rumors and assumptions around the crypto-sector, many of which are subsequently disproved by the government.
Not Enabling Legal Environment
Regulatory Convergence The Central Bank of Egypt has proved to be the most active institution in crypto regulation, along with the Egyptian government, represented by its Financial Supervision Authority (EFSA). There are no contradictions in the approaches to cryptocurrencies and blockchain between state regulators.
Definiteness of Legal Regulation In Egypt, there is no legislation regulating legal relationships related to blockchain and cryptocurrencies. Bitcoin and other cryptocurrencies are not officially recognized by the Egyptian Central Bank in financial and banking transactions, but there is no explicit ban on trade in cryptocurrencies.
Stability of Legal Regulation The government has been reported recently to be planning moves to develop such legislation and considering introducing a national cryptocurrency. However, given the rather negative attitude of the Egyptian authorities to cryptocurrencies in the past, it is very difficult to make forecasts whether the new regulation will be favorable and adequate with respect to crypto-business.
Adequacy of Legal Regulation Legal regulation of cryptocurrencies and blockchain in Egypt cannot be called adequate due to its complete nonexistence. The Egyptian authorities have consistently demonstrated their negative attitude towards cryptocurrencies without recognizing them as legal in the country.
Situation with the Rule of Law The conditions of the legal regulation of blockchain and cryptocurrencies are not favorable, and since the values of the sub-criterion of the rule of law are low (0.36), the amount of the difference between weighted (multiplied by Rule of Law Index score) and unweighted assessments are significant.
Neutral Infrastructure Environment
Egypt ranks 114th among 193 countries in the UN Global E-Government Development Index.The country ranks 120th in the WB's Doing Business rankings.