A Bitcoin and Dollar notes are seen in this illustration picture taken September 27, 2017. REUTERS/Dado Ruvic/Illustration
CAIRO – 17 December 2017: Bitcoin trading is illegitimate in Egypt, Head of the Egyptian Financial Supervisory Authority (EFSA) Mohamed Omran said on Sunday during his meeting with the Parliament’s Economic Affairs Committee.
“EFSA allows merely transactions involved in the financial control laws,” Omran noted, adding that his authority will announce more details on dealing with trading in Bitcoin soon.
He added the modifications, which will soon launch on Egypt’s Capital Market Law, stipulate that any impermissible activity is illegal and imposes a penalty on anyone practicing it.
Deputy Head of EFSA noted that it is not clear who the ultimate beneficiary of trading in Bitcoin is, adding that he recommends people do not buy or sell the digital currency.
What is bitcoin?
Bitcoin is a type of crypto currency independent of traditional banking, bitcoin started circulating in 2009 and have become the most prominent of several fledgling digital currencies, according to Reuters.
The virtual currency relies on a network of computers that solve complex mathematical problems as part of a process that verifies and permanently records the details of every bitcoin transaction made.
Unlike traditional currencies, where a central bank decides how much money to print based on goals like controlling inflation, no central authority governs the supply of bitcoin. Like other commodities and currencies, its value depends on people’s confidence in it.
Many governments globally are 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 $18,000 on the Luxembourg-based BitStamp platform. It has soared by roughly 1,700 percent so far this year.
In late August, the founders of Bitcoin Egypt told Reuters that Egypt’s first bitcoin exchange will go live in August, linking the Middle East’s most populous country with a cryptocurrency that has surged in value during recent months.
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.