Complete Crypto Ban in Egypt: How Law 194 of 2020 Stopped Cryptocurrency Use

Posted By Tristan Valehart    On 24 Nov 2025    Comments (8)

Complete Crypto Ban in Egypt: How Law 194 of 2020 Stopped Cryptocurrency Use

Egypt Crypto Activity Checker

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Egypt's Law 194 of 2020 prohibits cryptocurrency activities without Central Bank approval. This tool will help you understand if your activities could be illegal under Egyptian law.

On September 16, 2020, Egypt didn’t just update its banking laws-it shut the door on cryptocurrency for millions of people. Law No. 194 of 2020, also known as the Central Bank and Banking Sector Law, made it illegal to issue, trade, or promote any cryptocurrency without explicit approval from the Central Bank of Egypt (CBE). There was no gray area. No grandfathering. No exceptions. Just a flat-out ban.

What Law 194 Actually Banned

Article 204 of the law is the core of the ban. It doesn’t just target Bitcoin or Ethereum. It covers all digital assets-whether they’re coins, tokens, stablecoins, or anything else that acts like money on a blockchain. That means:

  • Buying or selling crypto on Binance, Coinbase, or any exchange is illegal
  • Running a crypto mining operation is a violation
  • Starting an ICO or token sale is forbidden
  • Even promoting crypto on social media or YouTube can get you in trouble
The law doesn’t just say “don’t do this.” It gives the CBE full power to refer violators to criminal courts under Article 205. No one knows exactly what penalties look like-fines, jail time, or both-but the threat is real. Banks were ordered to block transactions to known crypto platforms. By 2022, peer-to-peer trading in Egypt dropped by 92%.

Why Did Egypt Do This?

The official reasons are simple: fear. The CBE claims cryptocurrencies are too volatile, lack legal protection, and could cause capital flight. They say people could lose everything overnight. Internal reports from the CBE estimated $200 million in annual crypto transactions before the ban-small compared to Egypt’s $400 billion economy, but big enough to worry regulators.

But there’s more beneath the surface. Egypt’s currency, the pound, was already under pressure. Inflation was rising. People were turning to crypto not just to invest, but to protect their savings. The government didn’t want citizens bypassing the banking system. They didn’t want people moving money out of the country without oversight. Crypto, in their view, threatened monetary control.

Dr. Ahmed Kandil, a financial law professor at Cairo University, put it bluntly: “It’s about sovereignty. If people can send money out of Egypt without the central bank knowing, that’s a threat to the whole system.”

Who Got Hurt?

The ban didn’t just stop traders-it crushed startups, investors, and everyday users.

A 2022 survey by the Egyptian Fintech Startup Association found that 78% of blockchain companies had moved their operations to Dubai or Singapore. That’s $150 million in lost investment, according to association president Mohamed Saleh. Developers left. Engineers left. Entrepreneurs left.

On the ground, users faced frozen accounts and vanished funds. The Facebook group “Egypt Crypto Victims” had over 12,500 members by late 2023. They documented 427 cases of people locked out of their wallets-totaling $8.7 million in lost assets. Some had bought Bitcoin in 2019, held it through the 2021 boom, and woke up in 2022 to find their exchanges blocked and their money gone.

Even people who never traded crypto were affected. Banks started blocking transfers to any wallet address they could identify. People using crypto for remittances from the Gulf-common among Egyptian workers abroad-suddenly couldn’t receive money.

Friends trade Bitcoin with cash in a Cairo café while a bank monitor watches through a keyhole.

The Hypocrisy

Here’s the contradiction no one talks about: while banning crypto, Egypt’s government launched a national blockchain strategy in November 2022.

The Ministry of Communications announced plans to use blockchain for land registries, public records, and supply chain tracking. They even partnered with international firms to build government-run blockchain systems. But here’s the catch: they allowed blockchain-just not the cryptocurrencies that run on it.

Dr. Hanaa El Shenawy called it “Egypt’s Digital Policy Schizophrenia.” You can build a secure digital ID system using blockchain, but you can’t buy Bitcoin to pay for it. You can track wheat shipments with distributed ledgers, but you can’t use Ethereum to send money to your cousin in Saudi Arabia.

It’s like saying you can use a car engine to power a factory, but you can’t drive the car.

How People Still Use Crypto (Despite the Ban)

The law didn’t kill crypto-it drove it underground.

Chainalysis estimates that 3.2 million Egyptians-about 3.2% of the population-still access crypto through peer-to-peer (P2P) platforms and virtual private networks (VPNs). Annual transaction volume? Around $1.1 billion.

People use local payment apps like Fawry or Vodafone Cash to trade directly with each other. Someone in Cairo buys Bitcoin from a guy in Alexandria using cash. They meet in a café. No bank involved. No trace. The CBE can’t monitor every in-person deal.

Crypto ATMs? Still banned. But unofficial ones exist. Some are hidden in shopping malls. Others are in private homes. Operators risk arrest, but demand is high.

Reddit threads from 2021-2022 show users sharing tips on how to bypass bank blocks. “Use Payoneer to receive USD, then find a P2P seller,” was a common thread. The community learned to adapt.

Government uses blockchain for public services but locks up cryptocurrency in a barred cage.

What’s Next for Egypt?

The IMF has been pushing Egypt to modernize its financial system. In their July 2023 report, they pointed to “regulatory barriers to fintech innovation” as a major problem. Egypt’s $8 billion bailout package comes with strings attached-especially around financial inclusion and digital payments.

Meanwhile, Fitch Ratings predicts Egypt will shift toward a “controlled sandbox” by 2026-letting regulated institutions trade crypto under strict limits. The Central Bank has signaled openness to exploring a digital pound, but so far, no moves have been made.

Parliamentary committees have quietly reviewed possible amendments. But as of September 2023, no bill was introduced. The political will to reverse the ban hasn’t materialized.

The World Bank, on the other hand, expects the ban to stay in place through 2025. Why? Because the pound is still weak. Because inflation is still high. Because the government still fears losing control.

How Egypt Compares to the Region

Most of the Middle East took a different path. The UAE created the Virtual Assets Regulatory Authority (VARA) in 2022. Saudi Arabia licensed crypto exchanges. Bahrain built a fintech hub. Even Iraq has a regulatory framework.

Egypt is one of only three countries in the region with a total ban-alongside Algeria and Iraq (though Iraq’s enforcement is inconsistent). Globally, Egypt sits with China and India in the “prohibitive” category on the Cambridge Centre’s 2023 Crypto Regulation Index.

But unlike China, where crypto mining was crushed by state power, Egypt’s ban is more bureaucratic. No one’s been arrested en masse. No raids. Just silent enforcement: blocked accounts, frozen funds, and a chilling effect.

What This Means for You

If you’re an Egyptian citizen: crypto is still illegal. Even holding it isn’t explicitly banned-but if you trade, promote, or transfer it, you risk legal trouble. Banks monitor transactions. The CBE watches. The risk isn’t zero.

If you’re a foreign investor: Egypt’s crypto ban is a red flag. It signals a government that fears innovation more than instability. Fintech startups avoid Egypt. Venture capital flows elsewhere.

If you’re just watching: Egypt’s story is a warning. It shows how fear can override opportunity. A country with 100 million people, a young tech-savvy population, and massive digital potential chose control over progress.

The ban didn’t stop crypto. It just made it riskier. And for now, that’s enough for the Central Bank of Egypt.

Is it illegal to hold cryptocurrency in Egypt?

No, simply holding cryptocurrency is not explicitly illegal under Law 194 of 2020. The law bans the issuance, trading, and promotion of crypto without CBE approval. But if you’re caught buying, selling, or transferring crypto through banks or exchanges, you could be prosecuted. Holding alone won’t get you arrested-but any activity around it might.

Can Egyptian banks process crypto transactions?

No. Since 2020, Egyptian banks are legally required to block all transactions to known cryptocurrency platforms. Circular 4/2022 made this official: banks must identify and reject any payment linked to crypto exchanges, wallets, or P2P marketplaces. Many users report their bank accounts being frozen after sending money to Binance or Coinbase.

Has anyone been jailed for using crypto in Egypt?

There are no publicly confirmed cases of imprisonment solely for holding or trading crypto. However, Article 205 allows the CBE to refer violations to criminal courts. In practice, most enforcement has been financial-account freezes, blocked transfers, and business shutdowns. The threat of jail exists, but it’s rarely used.

Is Bitcoin mining legal in Egypt?

No. Bitcoin mining falls under “issuance” of cryptocurrency, which is explicitly banned under Article 204. Running mining equipment-even for personal use-is a violation. Power companies have reported suspicious energy usage linked to mining farms, and authorities have shut down some operations. The risk of legal action is real.

Why hasn’t Egypt lifted the ban despite global trends?

Egypt’s central bank and government prioritize monetary control over innovation. With a weak currency, high inflation, and a large informal economy, officials fear crypto could accelerate capital flight and undermine the pound. Unlike the UAE or Saudi Arabia, Egypt hasn’t built a regulatory infrastructure to manage crypto safely. Until the government trusts its institutions to handle digital assets, the ban stays.

Can I use crypto for remittances to Egypt?

Technically, no. Sending crypto to Egypt violates Law 194. However, many Egyptians abroad still use P2P platforms to send money. A sender in the UK buys crypto, transfers it to a local buyer in Egypt, who then pays the recipient in cash via Fawry or bank transfer. This method avoids banks entirely but carries legal risk for both parties.

Is Egypt planning a central bank digital currency (CBDC)?

There have been discussions, but no official plan. The Central Bank of Egypt has explored digital currency concepts internally, and the Ministry of Communications has shown interest in blockchain for public services. But no pilot program has been announced. A CBDC would require lifting the crypto ban or creating a separate system-neither has happened as of 2025.

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