- The Central Bank of Egypt is considering issuing a digital pound. This move is in partnership with the International Monetary Fund (IMF) and the World Bank.
- The initiative will allow Egyptians to settle payments with their mobile phones. Along with decreasing the amount of banknotes issued, the digital pound can be used for trade, transactions, and money exchange between people and organisations.
- This move could see Egypt join other African countries in Nigeria to launch digital currencies.
Central Bank Digital Currency (CBDC) — the digital version of a country”s paper currency— appears to be gaining traction as more African countries pursue this path.
The global trend towards digital currencies is rapidly increasing, and many African countries have embraced and are exploring payment system digitisation.
An official stated in late November 2023 that the Central Bank of Egypt is studying and considering issuing a digital pound.
Egypt’s economy is the 38th largest in the world and one of the largest in Africa. However, the most recent report on the nation’s economy indicates that it is in a slight slump.
Several countries are attempting to introduce digital versions of their paper currency as cryptocurrencies and other payment systems gain popularity. Over 100 nations are exploring CBDC, and in Africa, roughly 25 countries are either experimenting with or have fully embraced this initiative.
Senegal launched its digital currency, eCFA, in May 2017. Other African countries following this path include Ghana, Senegal, Tunisia, South Africa, and Nigeria.
In 2021, the Nigerian government launched a digital version of its currency, dubbed eNaira.
Issuing a CBDC could help Egypt’s economy stay afloat in difficult financial times. Potential benefits of the digital pound include reduced issuance of physical banknotes and paper transactions, lower transaction costs, financial inclusion, bridge location barriers, and digital transformation.
Furthermore, from a global perspective, implementing a digital currency could support international and cross-border payments, resulting in faster money transfers and a possible decrease in the difficulty of conducting physical banking operations.
Conversely, Nigeria’s eNaira naira has had little effect since its introduction; however, other African nations may be better able to realise the full potential advantages of a digital currency.
Moving forward with the plans for a digital pound, Egypt’s government is expected to establish guidelines to govern the system. While it has yet to issue guidelines on the digital pound, it did issue a framework for licensing and operating digital banks in July 2023.
