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Egypt's Framework for Digital Identity, Digital Assets, and Smart Contracts

Updated: Nov 13, 2023

Key Takeaways:
  1. The decree introduces a secure framework for digital identity verification in Egypt. It enhances security by incorporating knowledge, possession, and biometrics tailored to transaction risk levels.

  2. Simplified digital contracting ensures that only authorized users engage in secure financial transactions, reinforcing security in FinTech operations and aligning with Egypt's regulatory priorities.

  3. Entities must securely store financial information, following encryption guidelines outlined in the decree, ensuring confidentiality and integrity.

  4. Pend simplifies compliance with Decree 140 for NBFS enterprises, offering Mypend for digital identity, Spend for digital assets, and Dpend for smart contracts.

  5. Mypend streamlines digital identity per Decree 140, combining knowledge, possession, and biometrics for secure transactions.

  6. Spend ensures simple digital asset handling, aligning with Decree 140's requirements, ideal for digital contracts and non-cash transactions.

  7. Dpend facilitates secure smart contracts, ensuring user verification and easy customer approval with authenticated e-signatures.


The Financial Regulatory Authority (FRA) recently issued decree No. 140 of 2023 is a set of rules that aim to regulate FinTech entities to offer non-banking financial services (NBFS) to ensure security and smooth operation. The decree requires entities operating in the NBFS and those incorporating FinTech to be licensed. It focuses on three main areas: digital identity, digital contracting, and digital register.


1. Digital Identity:

The decree establishes a framework for verifying digital identities securely. It is comprised of three elements: (i) knowledge (including, for example, a username and password); (ii) possession (including, for example, ID, email address, payment account); and (iii) biometrics (including, for example, face print, fingerprint). The Digital Identification Process must correspond with the risk level of any given transaction, This approach ensures security while meeting the needs of customers and entities, as follows:

  • Low-risk transactions: these require a minimum of two components from the knowledge element, in addition to at least three components from the biometric element, and a minimum of four components from the possession element.

  • Medium-risk transactions: these require the elements specified at the basic level, in addition to the possession of a non-cash payment account.

  • High-risk transactions: these require the elements specified at the general level, in addition to the possession of an authenticated e-signature.


2. Digital Contracting:

Digital contracting involves verifying a user's identity using the established digital identification process. This step confirms that the user is authorized to make or engage in financial transactions and ensures that only authorized individuals can access services.


3. Digital Ledger:

Entities must electronically store contracts and related transactions using approved encryption technology. This measure ensures the security and confidentiality of sensitive financial information, protecting the integrity and privacy of customer data.


Decree No. 140 establishes a regulatory framework for the secure implementation of FinTech in the NBFS. By licensing and regulating the processes of digital identity, digital contracting, and digital ledger, the decree provides efficiency and security in FinTech entities. This framework allows stakeholders to embrace FinTech while maintaining customer trust and safeguarding the integrity of the financial ecosystem.


Pend’s Solutions: Simplifying FinTech Compliance with Decree No. 140"

Pend is stepping forward as a partner for enterprises navigating the transformed regulatory landscape of the Non-Banking Financial Services (NBFS). With three specialized solutions dedicated to simplifying compliance, Pend not only meets regulatory expectations but also empowers FinTech businesses for success in this evolving landscape. Now, let's explore the specific areas where Pend’s solutions leave a significant impact on compliance and success within the FinTech sector.


Mypend: Facilitating Digital Identity Management

Mypend, Pend’s solution, which stands out in the world of digital identity, serves as a comprehensive tool aligned with the stipulations of Decree No. 140, ensuring adherence to the Digital Identification Process. By integrating knowledge, possession, and biometrics seamlessly, Mypend facilitates a secure and straightforward process for businesses to establish and manage digital identities across various transaction risk levels.


Spend: Seamless Digital Asset Management

For businesses navigating digital contracting and transactions involving non-cash payment accounts, Pend introduces Spend, a solution that provides a secure environment for managing digital assets while aligning with the decree's requirements.


Dpend: Elevating Smart Contract Solutions

Completing Pend’s suite is Dpend, customized for businesses engaging in smart contracts. Dpend ensures precise verification of user identities and facilitates secure customer acceptance aligned with the Digital Identification Process. With authenticated e-signatures at its core, Dpend enables businesses to have access to a compliant digital contracts


If you want to learn more about how Pend's solutions can benefit your FinTech projects and ensure compliance with Decree No. 140, reach out to us. Pend is committed to providing secure, compliant, and innovative tools, helping businesses thrive in the changing regulatory landscape. Connect with us to discover more and start your journey to FinTech success.


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