The Central Bank of Egypt recently issued a statement which asserts no organisations in the country have been licensed to trade bitcoin. The statement follows news of the launch of Egypt’s first bitcoin exchange as reported on BitcoinAfrica.io on August 8, 2017. This puts the exchange in a precarious position in regards to its tentative launch on August 31.
No Authorisation for Bitcoin Exchanges
According to a top Central Bank official, the regulator has no plans to propose legislation or set up special laws that will allow trading of cryptocurrencies. Currently, digital currencies are not recognised in banking and financial transactions.
Reda Abdel Moaty, acting Chairman of the Egyptian Financial Supervisory Authority (FSA), also insisted no cryptocurrency exchanges had been authorised in Egypt. He reiterated no formal request had been put forth by an entity to open a bitcoin exchange. Therefore, any exchange operating without a license is contrary to the law and will be prosecuted. According to Masrawy, a news publicationf focused on in North Africa and the Middle East, Moaty stated the Egyptian Capital Market Law in its present form does not support cryptocurrency exchanges. The news outlet also reported that “the FSA confirmed that it has not issued licences for any trading platforms for bitcoin in Egypt and that it will pursue the founders.”
The Platform Launch and Regulatory Framework
The Bitcoin Egypt Exchange is a digital currency platform that enables traders to buy bitcoin using fiat currency, trade bitcoin to altcoins and convert their cryptocurrency to Egyptian pounds. Bitcoin Egypt founder Abdelrasoul stated in a recent BitcoinAfrica.io interview that the exchange plans to launch before the end of August. The exchange will only trade bitcoin at first and roll out other coins and tokens later. The exchange co-founder, Rhami Khalil said the platform has already received over 300 pre-registrations.
The Central Bank’s position puts the founders in a precarious position in regards to the launch. While Egyptian law is ambiguous on digital currencies, regulators have sought to halt its adoption citing a number of reasons. In July the Central Bank of Egypt rejected the use of bitcoin locally insisting it was not a legal tender in the country. Gamal Negm, the deputy governor of the Central Bank insisted the ban was necessary to ensure the stability of local banks.
Bitcoin Egypt has yet to respond to this new developments, and what it may mean for the upcoming exchange. Hopefully, this will be a minor hurdle in the journey to driving up bitcoin adoption in Egypt.