Crypto-funded debit card in Egypt

Article 206 of Law No. 194 of 2020 prohibits the issuance or trading of cryptocurrencies, or the establishment or operation of platforms for their trading, or conducting any related activities, without a license from the Board of Directors of the Central Bank.

Given that the CBE has not issued any such licenses, and has reiterated its warnings, this effectively means that the activities typically performed by VASPs (exchanges, custodians, etc.) are prohibited in Egypt.

Law No. 80 of 2002 (Anti-Money Laundering Law), as amended: This is the primary AML/CFT legislation in Egypt.

Prime Minister's Decree No. 164 of 2020 (Executive Regulations of Law No. 80/2002): Provides detailed rules for the implementation of the AML Law.

Law No. 194 of 2020 (The Banking and Central Bank Law): As mentioned above, this law governs banking and financial activities and explicitly addresses virtual assets.

Identification and Verification: Identifying the customer and verifying their identity using reliable, independent source documents, data, or information. This includes individuals, legal persons, and legal arrangements.

Beneficial Ownership: Identifying the beneficial owner(s) of the customer and taking reasonable measures to verify their identity.

Ongoing Monitoring: Conducting ongoing due diligence on the business relationship and scrutinizing transactions undertaken throughout the course of that relationship to ensure that the transactions are consistent with the financial institution's knowledge of the customer, their business, and risk profile.

Risk-Based Approach (RBA): Applying CDD measures based on a risk assessment. Activities involving virtual assets would inherently be considered high-risk, necessitating Enhanced Due Diligence (EDD), which would include:

Obligation to Report: Any transaction, regardless of amount, where there are reasonable grounds to suspect that it involves proceeds of crime or is linked to terrorist financing, must be reported without delay.

No Tipping-Off: Financial institutions and their employees are prohibited from disclosing to the customer or any third party that an STR has been filed or that an investigation is underway.

Customer Identification Data: All documents, data, and information used for identification and verification.

Transaction Records: All details of domestic and international transactions, including the nature, amount, currency, and parties involved.

Business Correspondence: Records of business correspondence relating to the customer relationship.

The CBE is responsible for licensing, regulating, and supervising banks and payment service providers, and ensures their compliance with AML/CFT regulations. As virtual assets fall under their purview according to Law No. 194 of 2020, they are the key regulator.

Egyptian Money Laundering and Terrorist Financing Combating Unit (EMLCU/EMLCFTU):

The EMLCU is Egypt's Financial Intelligence Unit (FIU) and is responsible for receiving, analyzing, and disseminating STRs to relevant law enforcement authorities. While operationally independent, it often works closely with the CBE.

Law No. 194 of 2020 (Central Bank and Banking Sector Law): Article 206 explicitly states that "issuing, trading, or promoting cryptocurrencies or transacting in them is prohibited within Egypt without a license from the Board of Directors of the Central Bank of Egypt." As of now, no such licenses have been granted, making these activities generally illegal within the formal financial system.

Dar al-Ifta al-Masriyyah (Egypt's official religious authority): Issued a religious decree (fatwa) in 2018 declaring cryptocurrency trading as impermissible (haram) under Islamic law, citing its speculative nature and associated risks. While not a tax law, this further shapes public and governmental perception.

Legal Basis: Article 206 of Law No. 194 of 2020 (the Central Bank and Banking Sector Law) explicitly states: "It is prohibited to issue cryptocurrencies or trade them, or promote them, or establish or operate platforms for their trading, or to carry out activities related to them without obtaining a license from the Board of Directors of the Central Bank in accordance with the rules and conditions determined by it."