Egypt’s first bitcoin exchange to begin trading this month
Cabinet also passes regulations for new investment law
CAIRO: Egypt’s first bitcoin exchange will go live later this month, the founders of Bitcoin Egypt said, linking the Middle East’s most populous country with a cryptocurrency that has surged in value in recent months.
Many governments around the world are still mulling how to regulate and classify bitcoin, a volatile digital currency that has captured the interest of speculative investors worldwide as its value has soared, roughly quadrupling since the start of 2017 and trading at around $4,400 on Thursday.
Egypt, most of whose 93 million people have no bank accounts but where electronic payments have grown in recent years, lacks regulations for digital currency. This means local retailers cannot accept it as payment but users on an exchange may be left to trade freely, potentially cashing in on its ascent.
“We’re still waiting on the Egyptian government to set some kind of regulations ... Without any laws, bitcoin is not legal money in Egypt,” said Bitcoin Egypt founder Rami Khalil.
He said the exchange has picked up about 300 pre-registrations from users ahead of its launch.
The Egyptian Financial Supervisory Authority, the country’s financial markets regulator, did not respond to requests for comment.
Khalil and co-founder Omar Abdelrasoul see their platform connecting a community of several thousand bitcoin enthusiasts who will for the first time be able to trade in Egyptian pounds, which have roughly halved in value since November after flotation under an International Monetary Fund loan program.
“Cryptoassets are happening whether (the Egyptian government) joins in or not. And by not joining they’re missing out on a very big market. Currently bitcoin is about a $70 billion market,” said Khalil.
Cryptocurrencies allow anonymous peer-to-peer transactions between individual users, without the need for banks or central banks.
Bitcoin’s lack of central authority makes it attractive to those wanting to get around capital controls. This has helped it proliferate in China, the world’s most active bitcoin market, but has led some governments to crack down on its use to prevent money laundering.
Those same dynamics could propel bitcoin in Egypt, where a shortage of hard currency after the 2011 uprising sharply restricted bank transfers. Though liquidity at banks has improved and capital controls have been lifted in recent months, businesses still resort to a black market for dollars to obtain currency not available in the formal banking system.
“We’re trying to get people used to the idea of bitcoin, to ready the market so that in a couple of years we will reach a greater number of users. But for now we are trying to let people know what cryptocurrency is,” said Abdelrasoul.
Egypt’s cabinet passes regulations for new investment law
Meanwhile, Egypt’s Cabinet on Thursday passed regulations for a new investment law aimed at attracting foreign investors to help the economy recover after a 2011 uprising.
Investment Minister Sahar Nasr said the law will now be passed to Egypt’s administrative court, the state council, which is expected to give a final legal review before the law enters into force.
The law aims to cut bureaucracy, especially for starting projects, and provide more incentives to investors looking to put money into Egypt.
Egypt’s economy has been struggling since the 2011 uprising drove tourists and foreign investors away, drying up foreign currency. Egypt signed a $12 billion International Monetary Fund program last year aimed at reviving the economy.
New incentives under the investment law include a 50 percent tax discount on investments made in underdeveloped areas, and government support for the cost of connecting utilities to new projects.
Under the law, investors can recoup half of what they pay to acquire land for industrial projects if production begins within two years.
It also restores private-sector free zones — areas exempt from taxes and customs — a policy that had held up the law’s passage because of objections to forfeiting tax revenues at a time of austerity.
President Abdel Fattah El-Sisi ratified the long-delayed investment law in June.