According to Daily News Egypt, the Central Bank of Egypt (CBE) has, once again, sent out a warning statement to the general public, against issuance, dealing, trading, or promoting all kinds of cryptocurrencies such as Bitcoin and any other associated activities.
The Central Bank of Egypt (CBE) indicated in the warning statement, that cryptocurrencies are associated with high risk due to their fluctuations, instability, and extreme volatility. Also, it is an uncontrolled and unregulated global speculation, making investing in them risky, which can lead to huge loss of funds.
The warning statement points to Article 206 of the Central Bank and Banking System Law promulgated by Law No 2020, which restricts all activities related to cryptocurrencies, with a major spotlight on Bitcoin.
In the warning statement, the Central Bank of Egypt (CBE) said that cryptocurrencies are not issued by them, or any official central issuing authority which can be held responsible. Also, these cryptocurrencies are not backed by any tangible assets and not under the jurisdiction of any regulators anywhere in the world. This means they lack the official backup support by the government enjoyed by the official currencies issued by the Central Bank of Egypt.
The Central Bank of Egypt (CBE) further said that trading of official currencies approved by them is allowed within the country, Arab Republic of Egypt. Also, all business owners within the Egyptian market are advised to stay away from trading in these high risk currencies – cryptocurrencies.
In 2018, cryptocurrency trading was forbidden in Egypt by Shawki Allam, the most senior religious authority of Egypt. Shawki declared the use of cryptocurrencies as forbidden under the Islamic Law which was passed in the form of a fatwa. He explained that the anonymity and volatility associated with cryptocurrencies could increase money laundering, tax evasion, terrorist financing and other illegal activities.
The religious decree by the Islamic Religion Authorities, is not legally binding and was not totally accepted by the masses. Despite the prohibitive religious law, Peer to Peer (P2P) Trading Platforms such as LocalBitcoins and Paxful, have increased steadily in terms of new users and trading volume.
Between 2019 and 2020, the trading volumes data from both LocalBitcoins and Paxful, shows that new member registrations and trading volumes went up by 100%, according to the firm’s Chief Marketing Officer, Jukka Blomberg.
But in early 2021, the Trading Market Volume data from Useful Tulips on both LocalBitcoins and Paxful shows that there has been an increased surge, which was more than the previous year, 2020. This made the firm’s Chief Marketing Officer, Jukka Blomberg, confirm that January 2021 was “the best month within the last three years.” in terms of trading market volumes.
Also, the total crypto trading volume and exchange sign-ups increased dramatically in Egypt across cryptocurrency platforms, surpassing the already high volume of 2020. According to Konstantin Anissiimov, the CEO of CEX.IO, a UK-based cryptocurrency exchange, bitcoin trading volumes in Egypt were up by more than 400% from December to January. This reflects massive adoption by the masses.