Crypto Ban Stands as Egypt Advances Blockchain for Trade, Identity

Source: [1] title1 (url1) [2] title2 (url2) [3] title3 (url3)

Egypt’s blockchain landscape is undergoing a transformation as the country balances regulatory caution with strategic exploration of decentralized technologies. While the Central Bank of Egypt (CBE) has maintained a strict ban on cryptocurrency trading since 2020, recent initiatives highlight a growing recognition of blockchain’s potential beyond speculative finance. Government officials and industry leaders are now prioritizing blockchain applications in sectors such as trade, logistics, and identity management, signaling a shift from risk aversion to curiosity about the technology’s utility.

The CBE’s legal framework, enshrined in Law No. 194 of 2020, prohibits the issuance, trade, or promotion of cryptocurrencies without prior approval, a stance reinforced by a 2018 religious fatwa declaring digital assets haram under Islamic law. Despite these restrictions, on-chain data reveals that blockchain is being leveraged for non-financial purposes. For instance, Egypt’s Advanced Cargo Information (ACI) system, implemented at customs, uses blockchain to enhance transparency and reduce fraud in cross-border transactions. This aligns with broader efforts to modernize public infrastructure, including discussions on blockchain-based land registration and supply chain optimization.

High-level meetings in Cairo have brought together academics, bankers, and tech innovators to map out blockchain’s role in addressing regional challenges. Mohamed Abdou, CEO of Pravica, emphasized the potential for “on-chain banking 2.0,” envisioning systems that enable instant cross-border remittances and secure lending. Such initiatives are particularly relevant given that remittances from Egypt’s 15 million expatriates account for 9% of the country’s $386 billion GDP. Meanwhile, EMURGO Labs and other stakeholders have underscored the need for Egypt to transition from a passive observer to an active participant in blockchain-driven economic reforms.

The tension between regulatory caution and innovation is evident in the government’s parallel exploration of a Central Bank Digital Currency (CBDC). While the CBE has not yet launched a digital pound, officials have acknowledged the strategic value of blockchain in enhancing monetary sovereignty and financial inclusion. This duality reflects a global trend where nations like the UAE and Saudi Arabia are adopting regulated blockchain frameworks, contrasting with Egypt’s more restrictive approach.

Despite legal hurdles, blockchain startups and academic institutions are testing decentralized solutions. For example, the MelBet betting platform has integrated blockchain to offer transparent, secure transactions for sports wagers. Such use cases highlight the technology’s appeal in sectors requiring trust and accountability, even as policymakers grapple with balancing innovation and stability.

The path forward remains complex. While Egypt’s blockchain ecosystem shows promise in non-financial applications, the absence of a legal framework for cryptocurrencies limits broader adoption. However, the government’s focus on utility-driven projects suggests a long-term strategy to harness blockchain’s strengths in areas like document verification, supply chain traceability, and digital identity. As global liquidity dynamics and institutional interest in blockchain evolve, Egypt’s approach could serve as a case study in navigating the intersection of regulation, technology, and economic development.

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[1] title1 (https://www.btcc.com/en-US/square/Cryptopolitan/1001747)

[2] title2 (https://eg.andersen.com/legality-cryptocurrency-in-egypt/)

[3] title3 (https://retailtechinnovationhub.com/home/2025/3/25/blockchain-in-egypt-which-sectors-are-already-using-this-technology)