The Central Bank of Egypt has received a law that would mandate crypto players to get a license before the operation. The extent of the regulation is that no one will create, operate or advertise anything relating to cryptocurrency without it. This means that any platform facilitating online crypto trading will be more legit now, especially in the country. We got wind of this development on the 28th of May.
The Draft Bill May Give More Power To The CBE Over Crypto
From what we’ve gathered so far, this new bill will give more power to the Directors of the CBE over the industry. Well, we also want to point out that the bill will pass into law before it happens. Peradventure it does, the Board of Directors will have the authority to determine what happens in the crypto sector. They can issue new rules that will guide the handling and trading of crypto in Egypt.
An official source revealed that this draft law aims to monitor the activities of fintech companies. It also aims at staying abreast of how fintech introduce new technologies into the financial and banking services sector. However, before the CBE’s Directors issue a new set of regulations and procedures, this bill will still regulate some areas. For instance, it will create a legal status to guide electronic authentications, electronic transfer orders and payment orders.
Also, it will establish a legal procedure for electronic settlement and independent notes. It will also do the same on issuing and circulating electronic cheques and discount orders.
Furthermore, the CBE’s Board will be responsible for determining the technical criteria to use in authenticating digital mechanisms.
Early Reports Suggests That The Banks May Have Been Preparing For The Bill
It’s true that the draft bill became public today, but it seems that the bank has been looking into it. For instance, we got a report at the beginning of this month about the Central Bank’s interest in blockchain. According to what we gathered, the National Bank of Egypt participated in one multibank and multinational trial. This exercise aimed at facilitating letter of credit activities on the platform of the blockchain consortium R3.
Another report indicates that the CBE conducted a feasibility study at the end of 2018. The aim was to determine how to cut down issuance cost. The bank was looking for a way to issue Egyptian pound digitally. That way, it could eliminate the costs of using banknotes and physical coins.
We can recall that Egypt also took a risk-averse stance on cryptocurrencies like BTC that has no central governing authority. The central bank then increased its rhetoric in preparation its first cryptocurrency exchanges launch in 2017.
It is safe to say that the new bill is not a surprise. It seems that the bank has been interested in the crypto industry for some time now.