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Wednesday, 29 May 2019

Crypto businesses will need to obtain licenses under proposed Banking Act

LEGISLATION WATCH- Aspiring crypto businesses are going to need licenses: Companies looking to establish digital currency and cryptocurrency platforms will be required to obtain licenses under the proposed Banking Act, an unnamed central bank official told state news agency MENA without providing further details. The bill would also give the CBE regulatory power over the use of cryptocurrency in Egypt. We noted earlier this month that the CBE has effectively blacklisted crypto in its recently issued e-commerce guidelines for banks. The current draft has been with the Madbouly Cabinet for review since January and is due to be introduced to the House of Representatives soon.

This isn’t necessarily a bad move. We can’t afford the CBE to block the exploration of crypto in Egypt — but the last thing Egypt needs is a modern-day El Rayyan scandal centered on crypto. If it can happen in Canada, where cryptocurrency exchanges are still essentially unregulated. The trick will be to balance a light hand with legitimate businesses with devastatingly draconian penalties for would-be fraudsters and startups that fail to build in adequate safety protocols.

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