Central Bank of Egypt Responds to First Bitcoin Exchange Launch

Following the news of the first bitcoin exchange launching in Egypt, a senior official at the country’s central bank promptly issued a statement that no entities have been authorized to trade bitcoin. As the central bank reiterates the legal status of the digital currency, other government agencies also weigh in.

Also read: First Bitcoin Exchange Launching in Egypt

Central Bank of Egypt’s Response

A senior official at the Central Bank of Egypt (CBE) reportedly responded to the news last week of the first bitcoin exchange launching in Egypt, according to local publications.

The central bank’s response came just hours after a handful of publications including Reuters reported about the launch of Bitcoin Egypt, which is expected at the end of August. If allowed to open for business, the platform would be the country’s first bitcoin exchange. News.Bitcoin.com recently interviewed its co-founder, Rami Khalil. “The tentative launch date is the 31st of August. We will definitely at least go into alpha testing at that time if we are not fully operational,” he told news.Bitcoin.com.

The CBE official said in his statement that the bank has no intention of issuing legislation or passing a special law that allows the trading of digital currency, including bitcoin. In addition, the cryptocurrency is not recognized in financial and banking transactions. He added:

So far there is no legislation or law on virtual currencies that allows electronic circulation in Egypt.

Khalil told Reuters that his upcoming exchange has already received about 300 pre-registrations.

Previous Denial by the Central Bank

CBE Deputy Governor Gamal Negm

In June, the CBE made an official statement denying the rumors that suggested it was exploring the use of digital currency such as bitcoin and was considering allowing its circulation and trading within the banking sector. “For the stability of the Egyptian banking system, the banks deal with the official currencies only, and never deal with any virtual currencies,” clarified CBE deputy governor Gamal Negm.

Lawyer Mahmoud Helmi, a specialist on economic disputes, told Al-Monitor that “the Egyptian legal position does not oppose bitcoin in particular.” However, he cited Law No. 38 of 1994 which stipulates that “dealing in foreign exchanges shall be limited to banks accredited by the competent authorities such as the central bank.” The publication also quoted him explaining that “the investigating authorities and the judiciary may consider that the sale of bitcoins in exchange for euros or US dollars is a [crime] … since it’s an unrecognized currency in Egypt.”

No License Has Been Issued

Acting Chairman of the Egyptian Financial Supervisory Authority (FSA), Reda Abdel Moaty, said in a brief statement last week, that the authority has not issued any licenses for digital currency exchanges in Egypt.

Mohamed Farid Saleh, Chairman of the country’s stock exchange concurred, telling Al Ahram that no license has been issued to any exchanges dealing with digital currency in Egypt.

Moaty also added that the authority has not received any requests from any entity to establish an exchange of digital currency such as bitcoin. He noted that an exchange trading without a necessary license is against the law and will be prosecuted, reported Masrawy, the leading news portal in Egypt, Middle East and North Africa. According to Moaty, the Egyptian Capital Market Law currently does not provide for the establishment of digital currency exchanges. The news outlet also reported on Saturday:

The FSA confirmed that it has not issued licenses for any trading platforms for bitcoin in Egypt and that it will pursue the founders.

Bitcoin Egypt did not respond to a request for comment at press time.

What do you think the central bank will do if Bitcoin Egypt launches? Let us know in the comments section below.

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