Quick Answer
No, cryptocurrency is illegal to trade or promote in Egypt.
- Law No. 194 of 2020 prohibits all unlicensed crypto activities.
- Violators face imprisonment and fines up to EGP 10 million.
Legal Status of Crypto in Egypt
Cryptocurrency is effectively illegal in Egypt, with a legal framework that strictly prohibits most related activities. The country's primary regulation, the Central Bank and Banking System Law, forbids the issuance, trading, or promotion of crypto without a license from the Central Bank of Egypt (CBE). As the main regulatory authority, the CBE has not only refrained from issuing any licenses but has also released multiple public warnings against dealing in digital currencies. This prohibitive stance is also influenced by a non-binding religious decree from Dar al-Ifta, which declared cryptocurrency transactions forbidden under Islamic law.
Current Regulations
The primary regulation governing cryptocurrency in Egypt is the Central Bank and Banking Sector Law No. 194 of 2020. This law explicitly prohibits the issuance, trade, or promotion of cryptocurrencies without first obtaining a license from the Central Bank of Egypt (CBE). However, the CBE has not issued any licenses or published a clear framework for the licensing process, effectively banning these activities. Those who violate the law face severe penalties, including imprisonment and fines that can reach EGP 10 million.
Regulatory Authorities
The oversight of cryptocurrency in Egypt is handled by key financial and religious bodies.
- Central Bank of Egypt (CBE): The CBE is the primary financial regulator responsible for enforcing Law No. 194 of 2020, which prohibits the issuance, trading, or promotion of cryptocurrencies without a license. It issues public warnings about the risks and has the authority to impose penalties for violations.
- Dar al-Ifta: As Egypt's primary Islamic legislative body, Dar al-Ifta issued a religious decree, or fatwā, classifying cryptocurrency transactions as haram (forbidden). While this ruling is non-binding, it significantly influences public perception and the government's restrictive stance.
- Financial Regulatory Authority (FRA): The Financial Regulatory Authority is not currently involved in crypto oversight but has been mentioned as a body that may be given future authority to monitor crypto operations. This potential role reflects a trend toward more institutionalized regulation should Egypt's legal framework evolve.
Historical Context
Egypt's approach to crypto began with a prohibitive tone. In 2018, Dar al-Ifta issued a religious decree classifying crypto as haram, followed by CBE warnings against trading. A potential policy shift emerged in 2019 with discussions of a licensing system. This culminated in the Central Bank and Banking Sector Law No. 194 of 2020, which formally banned issuing, trading, or promoting crypto without a license. As the CBE has yet to issue any licenses or procedures, the law created a de facto ban, stifling the domestic market and exposing violators to imprisonment and fines.
Compliance Requirements for Businesses in Egypt
In Egypt, compliance for businesses regarding cryptocurrency is straightforward: all related activities are prohibited unless explicitly licensed. Since the Central Bank of Egypt (CBE) has not issued any licenses, the legal framework is built on prohibition rather than a set of operational guidelines. The government's guidance focuses on avoidance to mitigate risks.
- Absolute Prohibition: The primary rule is strict adherence to the Central Bank and Banking System Law No. 194 of 2020. This law forbids any individual or entity from issuing, trading, or promoting cryptocurrencies without prior approval from the CBE.
- AML and KYC Context: The law does not outline specific Anti-Money Laundering (AML) or Know Your Customer (KYC) procedures for crypto transactions because these activities are banned. The prohibition itself serves as a control measure, driven by concerns that the anonymous nature of crypto facilitates financial crimes. The CBE has explicitly warned that crypto is associated with fraud and illicit activities.
- Mandatory Procedures: The only mandatory procedure is to refrain from all cryptocurrency activities. This includes trading, investment, promotion, and facilitation. The CBE has confirmed that no licenses have been granted, making any engagement illegal.
- Government Guidance: The CBE has issued clear warnings advising the public and financial institutions to avoid all dealings with cryptocurrencies. The guidance highlights extreme price volatility, the potential for electronic piracy, and the lack of legal protection or recourse for users who suffer losses.
Why this matters for Cross-Border Payments
Egypt's strict prohibition on cryptocurrencies creates significant hurdles for businesses that use digital assets for international transactions. By eliminating crypto as a payment rail, companies are forced to rely on traditional banking channels, which are often slower and more expensive for cross-border payments. This restriction increases operational friction and can isolate the Egyptian market from global partners who prefer the efficiency of digital currency settlements, ultimately hindering trade and financial innovation.
How Lightspark Enables Compliant Crypto-Native Payments
Lightspark offers a platform to modernize global payments by connecting businesses to the "Money Grid," an open network powered by Bitcoin. Its core products, Lightspark Connect and Grid Switch, enable instant, low-cost cross-border transactions. Connect allows businesses to access the Lightning Network directly, while Grid Switch links domestic real-time payment systems to the global network. This infrastructure addresses the friction of traditional finance by making money move as seamlessly as information online, available 24/7 without the typical delays or high fees.
For regulated institutions, Lightspark provides tools that facilitate compliance. The platform offers audit-ready reporting, flexible custody options, and enterprise-grade security. Grid Switch is designed with built-in compliance features, including support for the travel rule and OFAC screening, helping institutions expand into new markets while meeting their own regulatory obligations. This allows businesses to leverage crypto-native rails securely and transparently, even in restrictive environments.
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Notice: This article is provided for informational purposes only and does not constitute legal advice.
FAQs
Is it legal to own cryptocurrency in Egypt if I bought it before the ban?
The law primarily targets the act of issuing, trading, or promoting crypto, but the legal status of simple possession remains a gray area. Given the government's prohibitive stance and lack of legal protections, holding digital assets is extremely risky.
What are the penalties for using a VPN to trade crypto in Egypt?
While using a VPN may circumvent technical blocks, it does not change the illegality of the underlying crypto trading activity. Anyone caught violating Law No. 194 of 2020 faces severe consequences, including imprisonment and fines up to EGP 10 million, regardless of the methods used.
Is there any chance Egypt will legalize cryptocurrency in the future?
While the current framework is strictly prohibitive, some discussions suggest the Financial Regulatory Authority may eventually oversee the sector. However, any potential shift toward legalization would require significant legislative changes and a reversal of the Central Bank's current policy.
Sources
- Central Bank of Egypt. "The Fourth (4th) Warning Statement on Cryptocurrencies." Central Bank of Egypt, Central Bank of Egypt, 8 Mar. 2023, www.cbe.org.eg/en/news-publications/news/2023/03/08/warning-statement.
- "Egypt - Cryptocurrency Laws and Regulation." Freeman Law, Freeman Law, freemanlaw.com/cryptocurrency/egypt/.
- Iskander, Joseph. "The Legality of Cryptocurrency in Egypt." Andersen in Egypt, Maher Milad Iskander & Co., 21 Jan. 2025, eg.andersen.com/legality-cryptocurrency-in-egypt/.
- Kaur, Guneet. "An overview of crypto regulations in Egypt." Cointelegraph, Cointelegraph, cointelegraph.com/learn/articles/crypto-regulations-in-egypt.
- Marghany, Amir, et al. "DLT and cryptocurrencies." Multilaw, Multilaw, multilaw.com/Multilaw/ZENTSO/BusinessGuides/Presentation/Section_Home.aspx?GuideId=2&GuideCountry=Egypt&GuideSection=311.
- Youssry Saleh & Partners. "Cryptocurrency legality in Egypt." Lexology, Lexology, 28 May 2025, www.lexology.com/library/detail.aspx?g=a21a3371-3157-4c46-8ab2-1e15e9a59450.
