Stablecoin issuer / redeemer 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. 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.

Purpose and Nature of Business: Understanding the purpose and intended nature of the business relationship or transaction.

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:

Obtaining the approval of senior management for establishing or continuing the business relationship.

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.

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.

Practical Reality: Since cryptocurrencies are not legally recognized as assets within the formal financial system, and no specific tax framework exists, individuals are not expected to declare or pay capital gains tax on crypto profits. Any attempt to do so would contradict the CBE's prohibition.

None: As of now, Egypt has not introduced any crypto-specific tax legislation. The current focus is on prohibition and control rather than regulation and taxation.