Egypt’s Central Bank Crypto Ban: Law, Enforcement & Blockchain Outlook

Key Takeaways

• The Central Bank of Egypt (CBE) has banned all cryptocurrency issuance, trading and promotion under Law No. 194/2020 since 2020.
• Enforcement relies on warnings and occasional fines, but the decentralized nature of crypto makes full control difficult.
• A 2018 religious fatwa classifies digital assets as haram, adding a major cultural barrier.
• Egypt embraces blockchain for government services like customs, but separates it from speculative crypto.
• Future possibilities include a state‑backed Central Bank Digital Currency (CBDC) while the crypto ban stays in place.

Central Bank of Egypt is the country's monetary authority that oversees banking regulation and monetary policy. In 2020 it issued Law No. 194/2020, a sweeping legal instrument that puts a hard stop on any crypto‑related activity that isn’t explicitly approved by the CBE. The law’s language is blunt: anyone who issues, trades, advertises or facilitates cryptocurrencies can face administrative sanctions, up to criminal prosecution.

The prohibition is not just a paper rule. The CBE has issued dozens of public warnings, labeling crypto as “highly speculative” and warning of potential fraud, money‑laundering and threats to financial stability. While the bank rarely announces specific raids or prosecutions, its messaging creates a clear deterrent for banks, payment processors and licensed financial institutions.

Legal Framework: Law No. 194/2020

Law No. 194/2020 is the Central Bank and Banking System Law that embeds the cryptocurrency ban within Egypt’s financial regulatory code. The law defines “virtual currencies” as digital representations of value that are not issued by a central bank or public authority. It explicitly prohibits:

• Issuing any cryptocurrency or tokenized asset.
• Operating exchanges, broker‑dealers, or custodial services for crypto.
• Advertising, soliciting or otherwise promoting crypto to the public.
• Using crypto for payments, remittances or any commercial transaction.

Violations can trigger administrative fines ranging from 50,000 to 1,000,000 Egyptian pounds, and in severe cases, criminal charges that lead to imprisonment.

Enforcement: How the Ban Is Policed

Enforcement is a blend of regulatory oversight, bank supervision, and informal market monitoring. The CBE works with the Financial Intelligence Unit (FIU) to flag suspicious transactions, especially those that involve known crypto wallets or offshore exchanges. In 2023, the FIU issued a joint bulletin identifying 12 local entities that allegedly facilitated crypto transfers, resulting in three administrative penalties.

Nevertheless, the U.S. State Department is an American diplomatic agency that publishes annual investment climate reports notes in its 2025 Egypt Investment Climate Statement that enforcement remains “opaque”. Crypto activity continues on peer‑to‑peer platforms and through VPN‑masked services, which are technically illegal but hard to trace.

Most of the CBE’s deterrence comes from its public statements. In February 2024, the bank released a video warning that “any individual or entity dealing with encrypted virtual currencies exposes themselves to severe financial and legal risks.” The tone is educational rather than punitive, reflecting a strategy of discouragement over mass prosecutions.

Religious Dimension: The 2018 Fatwa

In April 2018, Egypt’s Dar al‑Ifta issued a fatwa that declared digital currencies to be haram (forbidden) under Islamic law because they lack intrinsic value and can be used for speculation. This religious ruling predates the 2020 law but reinforces the government’s stance, making crypto a taboo subject not only legally but culturally.

The fatwa has had a chilling effect on public adoption. Surveys among Egyptian millennials show that 68% view crypto as religiously suspect, even if they understand the technology. This cultural barrier means that any future liberalization would need a coordinated religious re‑assessment, not just a legal amendment.

Blockchain Adoption: A Selective Embrace

While crypto is banned, Egypt distinguishes it from the underlying blockchain technology. The government has rolled out a blockchain‑based Advanced Cargo Information (ACI) system that tracks import‑export shipments, increasing transparency at customs.

Other pilot projects include a blockchain land‑registry prototype in the Ministry of Housing and a supply‑chain solution for pharmaceutical imports. These initiatives prove that Egyptian authorities value distributed ledger benefits-immutability, auditability, and reduced fraud-when applied to state functions.

The split‑track approach sends a clear message: “We are open to blockchain for efficiency, but we will not tolerate speculative digital currencies.” This stance is echoed in the Central Bank’s 2022 research paper, which recommends a “controlled sandbox” for blockchain startups that comply with AML/KYC standards.

Central Bank Digital Currency (CBDC) Outlook

In 2023, the CBE commissioned a feasibility study on a digital version of the Egyptian pound. The study, titled “Digital Money for Financial Inclusion”, outlines a token‑based CBDC that would be issued directly by the central bank, fully regulated and backed by fiat reserves.

The proposed CBDC would operate on a permissioned blockchain, allowing the CBE to maintain full oversight, enforce AML rules, and limit systemic risk. This contrasts sharply with the open‑source, permissionless crypto ecosystems that the 2020 law targets. Early pilots in 2024 with a limited group of banks showed promising results in speeding up inter‑bank settlements.

Analysts predict that a CBDC could be rolled out nation‑wide by 2026, providing a digital payments alternative that satisfies both modern convenience and regulatory control. The likelihood of that rollout is high, given the CBE’s consistent messaging and the government’s push for financial inclusion.

Regional Context: How Egypt Stands Out

Egypt’s model is the most restrictive in the region, combining legal prohibition, religious edicts, and a cautious embrace of blockchain. The UAE and Saudi Arabia, by contrast, have created licensing regimes that aim to attract investment while maintaining oversight.

What This Means for Businesses and Individuals

For any Egyptian company, the rule of thumb is simple: do not accept, hold, or trade cryptocurrencies in any form. Even indirect exposure-such as paying suppliers in Bitcoin-can trigger regulatory scrutiny. Banks will refuse to process crypto‑related transactions, and payment processors are required to block wallets linked to exchange platforms.

Individuals who hold crypto on foreign exchanges are technically in breach of the law, though enforcement is rare unless a complaint is lodged. The safest approach is to keep crypto holdings offshore and avoid any transaction that could be traced back to Egypt.

On the upside, firms that develop blockchain solutions for government contracts can benefit from fast‑track approvals. The CBE’s sandbox program offers seed funding and regulatory guidance for startups that meet AML/KYC requirements.

Future Scenarios

Three plausible paths could reshape Egypt’s crypto landscape:

1. Maintaining the status quo: The CBE continues to enforce the ban while expanding blockchain pilots.
2. Partial liberalization: The government introduces a licensing regime for crypto assets deemed “stable” or “utility‑linked,” similar to the UAE model.
3. Full reversal: A future administration decides the ban hampers fintech growth and lifts restrictions, pending a new religious edict.

Given the current political and economic climate, scenario one appears most likely through at least 2026.

Frequently Asked Questions

Is it illegal for an Egyptian citizen to own Bitcoin abroad?

Yes. Law No. 194/2020 prohibits Egyptians from possessing or transacting in cryptocurrencies, regardless of where the assets are held. Enforcement is rare unless the activity becomes public, but the legal risk remains.

Can Egyptian banks offer crypto‑related services under the current law?

No. Banks must obtain explicit CBE approval to handle any crypto activity. To date, no bank has received such a licence, and the CBE’s guidance makes it clear that crypto services are off‑limits.

What blockchain projects are currently supported by the Egyptian government?

Key initiatives include the Advanced Cargo Information (ACI) system at customs, a pilot land‑registry blockchain, and a pharmaceutical supply‑chain tracking solution. These projects are government‑led and operate under strict AML/KYC rules.

Will Egypt launch a Central Bank Digital Currency soon?

The CBE’s feasibility study and 2024 pilot suggest a CBDC could be introduced by 2026. It would be a permission‑based digital pound, fully regulated and distinct from the banned cryptocurrencies.

How does the 2018 fatwa affect crypto investors?

The fatwa classifies crypto as haram, meaning many devout Muslims avoid it for religious reasons. This cultural stance reinforces the legal prohibition and makes public advocacy for crypto difficult.