Egypt could become one of the world’s top Bitcoin trading hubs within weeks thanks to the launch of the country’s first cryptocurrency exchange.
The Bitcoin Egypt project will allow Egyptians to buy Bitcoins using Egyptian Pounds (EGP) for the first time.
The project is the brainchild of Alexandrian entrepreneurs Rami Khalil and Omar Abdelrasoul, who seized the opportunity to capitalise on the country’s growing demand for Bitcoin.
“We got the idea after we saw that there were lots of people in Egypt who wanted to trade cryptocurrencies but they were a hard time doing it on international exchanges as they were unable to buy coins using EGP,” Abdelrasoul said.
“So we decided to offer a solution by giving them the chance to trade using the Egyptian Pound, ” he added.
The news comes at a time when global interest in Bitcoin has surged thanks to the rising value of the cryptocurrency.
Meanwhile the value of Egypt’s own currency was halved in November last year following the devaluation of the Egyptian Pound.
Overnight, many Egyptians saw the value of their savings reduced by 50% and today the US Dollar fetches around 18 EGP compared to around 7 EGP in 2013.
These days some Egyptians currently use high end computers to ‘mine’ for bitcoins online in the hope of making a living finding the cryptocoins, which are currently valued at 77573 EGP each.
However, Bitcoin trading was previously difficult thanks to the country’s foreign currency shortage and the unwillingness of many international exchanges to accept EGP.
Abdelrasoul hopes that the new exchange will make it easy for ordinary Egyptians to buy and sell coins in local currency.
“We think it will bring lots of positivity for Egypt with lots of opportunities for innovation and development.
“Now that there is an exchange accepting EGP, it will allow people to start developing applications and uses for Bitcoin in Egypt,” he added.
However, the value of Bitcoin remains volatile and many investors believe that that current high value of the cryptocurrency comes as a result a bubble, which could burst sending exchange rates crashing within minutes.
Earlier this month Chairman of the Egyptian Financial Supervisory Authority (EFSA) Sherif Samy warned potential Bitcoin investors about the risks of trading given that the currency is unregulated in Egypt and no legal protections exist.
In June, the country’s Central Bank denied reports that it planned to recognise Bitcoin or other cryptocurrencies.
Despite the unregulated nature of the industry, Abdelrasoul claims that the startup has not suffered any issues from the authorities.
So far we’ve had no problems as it’s a bit of a grey area. They don’t seem to have a problem with Bitcoin trading,” he added.
In fact, Abdelrasoul claims that Bitcoin usage has grown in Egypt during recent years of instability.
“Bitcoin use is growing and it could be useful for people who are affected by the devaluation, if they wanted to invest their money in cryptocurrencies,” he said.
However, he believes that it is too early to tell whether Bitcoin could provide a stable alternative to the beleaguered Pound.
He added: “The crypto market in egypt is still young and unpredictable.”