Central Bank of Egypt playing long game on digital EGP

The Central Bank of Egypt (CBE) is quietly laying the groundwork for what could become its most ambitious monetary project yet — the digital EGP (e-Pound). As central bank digital currencies (CBDCs) move from concept to reality globally, Egypt is weighing the promise of financial inclusion and efficient government payments against cybersecurity risks, banking sector stability, and a deeply entrenched cash economy.

Where things stand: The CBE completed its initial research phase and moved on to proof of concept, with an official rollout broadly targeted for 2030. That timeline is anchored in a 2024 cabinet IDSC roadmap, which tethers the e-Pound to a state mandate of achieving 100% financial inclusion and expanding active e-wallets to 80 mn by the end of the decade.

It’s not crypto

Digital currency is different from cryptocurrency. Digital tokens like BTC are not issued or backed by any government or central bank. If launched, “the digital EGP would be an official digital form of the national currency issued directly by the central bank,” digital economy expert Mai Hegazi explains.

It’s also not the same as mobile payment apps like Vodafone Cash or Fawry. “These types of electronic wallets are merely intermediaries managed by banks or telecom companies to store traditional cash and facilitate its transfer,” Sayed Kasem, a member of the Egyptian Society for Political Economy and Legislation, explains. Digital currency is a new system, and it has not seen widespread adoption — yet.

Moving cautiously

Globally, CBDC development remains uneven. While 146 countries are actively exploring digital currencies and 77 have reached advanced research, pilot, or launch stages, complete public retail rollouts remain rare. Only three countries have completed them — the Bahamas, Jamaica, and Nigeria — according to the Atlantic Council’s CBDC tracker.

“Not every digital step means progress; some projects do not just test technology, but rather test the readiness of the economy itself,” financial analyst Hany Abou El Fotouh tells EnterpriseAM. “Does Egypt need a digital currency issued by the CBE now, or is the calmer and more realistic priority to strengthen the existing payments infrastructure before moving to a more sensitive tool?”

The CBE’s measured pace reflects strategy, not hesitation. “The CBE treats the digital EGP project as a long-term strategic initiative linked to the future of the monetary system, not just as a new payment tool,” AASTMT economics professor Shaimaa Wagieh says. “The CBE is currently focusing on studying international models […] before moving into the actual implementation phase,” she adds. EG Bank board member Mohamed Abdel Aal notes that financial market volatility and regional geopolitical challenges also slowed the project’s early execution.

Lessons from abroad

The CBE is drawing lessons from Gulf initiatives as well as retail CBDC pilots in India and Nigeria. For the UAE and Saudi Arabia, the focus has largely been wholesale payments and cross-border settlements between the two states — through Project Aber — rather than replacing cash. “The importance of Project Aber lies not only in the technical aspect, but in the fact that it proved the feasibility of using CBDCs to settle cross-border payments between two countries more efficiently,” Wagieh says.

Another multilateral project, mBridge, explores a wider experiment — including the Central Bank of the UAE, the Bank for International Settlements, Innovation Hub Centre in Hong Kong, the Hong Kong Monetary Authority, the Bank of Thailand, and the Digital Currency Institute of the People’s Bank of China. “The most important lesson for Egypt here is that digital currencies may not be just a local payment method but a tool to enhance the efficiency of international trade, investment, and remittances,” Wagih adds.

India and Nigeria offer retail lessons: India has seen success with its experiment, but this is due more to the advanced digital environment that preceded the digital currency, rather than the new system itself, Wagieh explains. And the environment is key — Nigeria launched eNaira relatively early but failed to reach target usage levels because users were more comfortable using pre-existing forms of digital payment, Wagieh notes. Ultimately, “the success of the digital EGP will depend entirely on the added value it will offer to citizens compared to solutions already available,” she says.

The pros

The digital EGP could improve payment efficiency, reduce cash handling costs, strengthen financial inclusion, and help formalize parts of Egypt’s large informal economy — if it’s implemented successfully. “Unlike paper cash, the digital EGP will provide an accurate record for every financial transaction,” Kasem says. Wagieh notes that “cash subsidies and social transfers can be directed straight to beneficiaries instantaneously, securely, and traceably. Leakage rates can be minimized, and targeting can be improved.” Meanwhile, the currency could even become “programmable money,” directing funds to specific purposes according to regulatory controls, according to Hegazi.

The risks

The biggest challenge is ensuring that a retail CBDC strengthens rather than disrupts the banking system. “If a portion of deposits shifts to the digital EGP, the banks’ ability to lend could be affected,” Wagieh warns. Therefore, many central banks are designing CBDCs to complement commercial banks rather than compete with them.

Cybersecurity and privacy: Kasem describes cybersecurity as “the essential pillar for the success and stability of launching the digital EGP.” Abou El Fotouh, however, says there are additional risks to consider as well. “There are questions regarding privacy, transaction traceability limits, and whether the commercial banks will still have a role if citizens have a direct payment tool linked to the central bank,” he says.

OUR TAKE- The digital EGP is a monetary reform, not a tech project. The CBE should resist rushing into a retail launch, focusing instead on wholesale settlements and strengthening the existing payment ecosystem. As Wagieh notes: “The digital EGP represents the next stage of evolution, not the starting point.”