Egypt's Complete Crypto Ban: What Law 194 of 2020 Really Means

On September 16, 2020, Egypt didn’t just update its banking laws-it shut the door on cryptocurrency for millions of its citizens. Law No. 194 of 2020, officially called the Central Bank and Banking Sector Law, didn’t just regulate digital assets. It banned them. Completely. And that ban still stands today, with no signs of changing anytime soon.

What Law 194 of 2020 Actually Says

At first glance, Law 194 looks like a routine banking reform. It’s 241 articles long, replacing an older law from 2003. But hidden in Article 204 is the real punch: no one in Egypt can issue, trade, or promote cryptocurrencies without prior approval from the Central Bank of Egypt (CBE). And here’s the catch-no one has ever received that approval.

This isn’t a gray area. It’s a total ban. That means exchanges like Binance and Coinbase can’t operate legally. Mining rigs? Illegal. ICOs? Banned. Even running a YouTube channel explaining Bitcoin? Technically, that’s promotion-and it’s prohibited unless the CBE says otherwise. And they haven’t.

The law doesn’t just target big players. It hits everyday users too. If you bought Ethereum in 2019 and still hold it, you can’t sell it legally in Egypt. You can’t convert it to Egyptian pounds through a bank. You can’t even use it to pay for services from local businesses without risking legal trouble.

Why Did Egypt Do This?

The CBE says it’s about protecting people. Their official warnings claim cryptocurrencies are too volatile, lack legal protection, and could cause financial chaos. They point to price swings, scams, and money laundering risks. But the real reasons run deeper.

Egypt’s economy has been under pressure. The Egyptian pound lost nearly half its value between 2016 and 2023. Capital flight-people moving money out of the country-was a major concern. Cryptocurrencies made it easier for people to bypass strict currency controls. Estimates from CBE internal reports suggest Egyptians were moving around $200 million a year into crypto before the ban. That’s money the government couldn’t track, control, or tax.

There’s also the issue of sovereignty. Egypt’s central bank doesn’t want a digital currency-any digital currency-to compete with the Egyptian pound. If people start using Bitcoin or USDT as their real money, the CBE loses control over interest rates, inflation, and monetary policy. That’s not just an economic problem-it’s a political one.

Who Got Hurt?

The ban didn’t just stop trading. It froze lives.

Thousands of Egyptians who bought crypto before 2020 suddenly found their accounts locked. Binance and Coinbase blocked Egyptian users. Bank accounts linked to crypto wallets were frozen. Some people lost access to hundreds of thousands of dollars in assets. The Facebook group ‘Egypt Crypto Victims’ documented over 427 cases involving $8.7 million in trapped funds.

Startups didn’t survive. A 2022 survey found 78% of Egypt’s blockchain entrepreneurs packed up and moved to Dubai or Singapore. That’s $150 million in lost investment, talent, and innovation gone overnight. Egypt had one of the fastest-growing fintech scenes in Africa. By 2022, fintech investment had dropped 63%-from $485 million to just $178 million.

Even regular users suffered. A YouGov poll in February 2023 showed 68% of Egyptians supported the ban-but only 22% could explain what Law 194 actually said. Most people weren’t voting for policy. They were scared of scams. And the government used that fear to justify a sweeping crackdown.

The Enforcement Machine

The ban isn’t just on paper. It’s enforced.

Starting in 2020, the CBE issued four official warnings, each one tightening the screws. Circular 4/2022 told banks to block all transactions to known crypto platforms. Banks complied. Peer-to-peer trading volume dropped 92% by the end of 2022.

Financial institutions now have to use monitoring systems to detect crypto activity. Small banks had 18 months to comply. Big banks had six. The CBE spent EGP 120 million ($3.8 million) in 2022 on blockchain analysis tools-but admitted in their annual report that they still struggle to track decentralized finance apps.

And then there’s the legal risk. Article 205 lets the CBE refer violations to prosecutors. No one knows the exact penalties-no fines are published. But people have been prosecuted under both Law 194 and Egypt’s 2018 Anti-Money Laundering Law. There are 47 known cases of dual charges, meaning someone could face jail time for simply sending Bitcoin to a friend.

The Contradiction

Here’s the strangest part: while Egypt bans crypto, it’s building blockchain.

In November 2022, the Ministry of Communications launched a national blockchain strategy. They’re testing blockchain for land registry, supply chains, and government records. The goal? Transparency, efficiency, and digital transformation.

But you can’t use blockchain without crypto. At least not in the way most developers understand it. Blockchain and cryptocurrency are separate technologies-but they’re deeply linked. Egypt wants the tech without the currency. It’s like wanting a car engine but banning gasoline.

Dr. Hanaa El Shenawy called it “Egypt’s Digital Policy Schizophrenia.” And she’s right. The government wants to be a tech leader-but only if it controls every byte.

What’s Happening Now?

As of 2025, the ban is still absolute. But cracks are forming.

Chainalysis estimates that 3.2 million Egyptians-about 3.2% of the population-are still using crypto. They’re using VPNs, peer-to-peer apps, and cash trades to bypass the ban. Annual transaction volume? Around $1.1 billion.

Parliamentary committees have quietly started reviewing possible changes. There’s talk of allowing institutional trading-banks or big investors buying crypto under strict rules. But no formal proposal has been introduced.

And then there’s the IMF. Egypt is negotiating an $8 billion bailout. The IMF’s July 2023 report explicitly called out Egypt’s “regulatory barriers to fintech innovation” as a problem. They want modernization. Crypto bans don’t fit that picture.

Fitch Ratings predicts Egypt will move toward a “controlled sandbox” by 2026-where crypto is allowed under tight supervision. The World Bank, meanwhile, says the ban will stay because “monetary sovereignty concerns” are too high, especially with the pound still weak.

What This Means for You

If you’re in Egypt: don’t assume you’re safe just because you’re not trading openly. Your bank might still flag your account. Your phone might get blocked. Your assets could vanish without warning.

If you’re outside Egypt: don’t assume Egypt’s ban is like China’s. China banned crypto trading but kept mining. Egypt banned everything-including mining, promotion, and even educational content. It’s one of the strictest bans in the world, alongside Algeria and Iraq.

If you’re an investor or developer: Egypt’s market is frozen. The talent is gone. The startups have moved. The government’s message is clear: no innovation without permission. And permission isn’t coming anytime soon.

The real question isn’t whether crypto will return to Egypt. It’s whether Egypt will change before it’s left behind.

How People Are Still Using Crypto

Despite the ban, crypto hasn’t disappeared. It’s gone underground.

People use P2P platforms like Paxful and LocalBitcoins, trading cash for Bitcoin in person or through mobile money. Others use Telegram bots to swap stablecoins like USDT. Some buy crypto on foreign exchanges and withdraw to wallets, then use those wallets to pay for services from freelancers abroad.

But it’s risky. One user on Reddit described how his account was frozen after he sent $500 to a friend who used it to pay for web hosting. The bank flagged it as “unauthorized foreign transaction.” He lost access to his entire savings.

VPN use has spiked. Internet providers report a 300% increase in traffic to crypto-related sites since 2021. But the government is cracking down on those too. In 2023, several popular VPN services were blocked by court order.

There’s no legal way out. Only ways to hide.