As Egypt Restricts Banking, Bitcoin seen as alternative

COVID-19 is a name that resonates fear. What started in China has now spread to the entire world with European countries affected the most after the USA. The USA currently is leading with maximum cases followed by Italy and Germany. Amidst this havoc, Eygpt’s Central bank is taking all the necessary precautions by limiting cash deposits as well as withdrawals across all its branches.

According to local news reports, the central financial authority has clearly mandated banks to limit the withdrawal to 10,000 Egyptian and 50,000 Egyptian pounds for individuals and business enterprises respectively. Limitations on ATM withdrawals also was initiated at 5,000 pounds. The authority has encouraged people to transact electronically and have asked people to restrict the use of hard cash.

The main reason behind this urgent appeal and decision has been the fear of COVID-19 spread. WHO had earlier claimed that currency notes cannot be a source of spread but the way the virus has spread, it implies that the virus can last pretty long on surfaces including currency notes. 

The Egyptian banking authorities are urging people to adopt the digital wave and bring about a transformation in the manner one makes payments. The need for adoption has been doubly stressed especially when the banks are forgoing the transaction fees for ePayments.

Amidst the commotion, Bitcoin appears as a resurgent tool especially now that people are going cashless due to the virus. There are many pluses when it comes to bitcoin, as there are no losses registered in FX and the settlement of transaction takes place within 30 minutes. Like an invisible hand, the BTC addresses have increased due to COVID-19 fear almost putting economies on standstill.

Digital platforms are being pushed as feasible alternatives. It will prove to be a doubt edged sword which will inculcate habits of using the electronic media as well as ensure people do not touch hard cash often. This would go a long way in ensuring the spread risk is eliminated. 

The virus has made inwards in the country claiming lives. The tourism industry which is what drives the economy has been destroyed as the people across the world have quarantined themselves and restricted their travel. 

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