A cryptocurrency startup called Bitcoin Egypt is launching the first bitcoin exchange in the country this month. News.Bitcoin.com talked to co-founder Rami Khalil to find out more about the exchange as well as the bitcoin scene in Egypt.
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Bitcoin Exchange Launching in Egypt
Founded by Rami Khalil and Omar Abdelrasoul, Bitcoin Egypt plans to launch a bitcoin exchange this month. “The tentative launch date is the 31st of August. We will definitely at least go into alpha testing at that time if we are not fully operational,” Khalil told news.Bitcoin.com.
He claims that it will be the first in the country. “There were no prior (registered) exchanges before,” he detailed, citing “everything operates peer-to-peer and under the radar now. It’s currently a ‘black’ market in Egypt.”
At launch, the exchange will only support trading between the Egyptian pound and bitcoin. “The fees will be a fraction of the transaction size (<0.25%),” Khalil said. The company plans to add support for ether, other altcoins, as well as other fiat currencies in the near future, followed by a payment service next year.
Only “rudimentary contact information (full name, ID numbers, address, etc..)” will be collected by the exchange, he detailed, adding that “since bitcoin is technically a commodity in Egypt, we’re not bound to any formal KYC/AML regulations.” Moreover, he said “we will only be doing it to deter potential money launderers from abusing anonymity on our exchange, and to of course be roughly prepared for any future regulations set by the Egyptian government.”
The bitcoin ecosystem in Egypt is currently small with only a handful of traders listed on Localbitcoins. However, Khalil said “there are a few hundred people actively using and trading bitcoin on a daily basis in Egypt on online forums.” As for merchant adoption, he said it is “virtually non-existent,” noting that “people generally assume it’s taboo. We’re of course looking to change that outlook, and improve adoption.”
Authorities’ Warnings
Last week, Chairman of the Egyptian Financial Supervisory Authority (EFSA) Sherif Samy reiterated that digital currencies such as bitcoin and ether are not authorized or supervised by the authorities, according to local publications. With the absence of legal and loss protection, any dealings with them carry significant risks, the chairman noted.
In June, there were reports that suggested that the central bank was considering allowing the circulation and trading of digital currencies, which the bank’s deputy governor Lobna Helal promptly denied.
“The central bank rejected this currency because the state can control the local and foreign traditional currencies, and can impose certain fees on their movement and transfer to and from Egypt,” banker and economist at Zagazig University Ashraf Ibrahim told Al-Monitor. With state-controlled currencies, “the central bank can tax the investment and trade activities generated by those funds, but cannot do the same with bitcoin,” he asserted.
No Digital Currency Laws Currently
Khalil told news.Bitcoin.com that “from personal contacts, the Ministry of Finance fully understands what bitcoin is, and only has problems with its potential for money laundering,” adding that:
Formally, there are zero laws or regulations in place about digital assets/cryptocurrency. We’re hoping to help shape their views and provide any assistance where needed.
He then noted that “the local banks have been very firm in asserting that they have no plans to start providing bitcoin services themselves and that they will never consider it a currency, but so far no one has turned us away from opening a bank account in our company’s (very explicit) name.”
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