CBE seeking to launch government-issued E-Pound to boost LE’s competitiveness

Cairo – January 9, 2024: Egypt’s central bank is preparing to issue a digital pound titled E-Pound by 2030, according to the government’s strategy for the new presidential term (2024-2030), but did not disclose further details on its implementation, timeline, or potential policies.

The Central Bank of Egypt (CBE) aims to strengthen monetary policy efficiency and the Egyptian pound’s competitiveness, as well as better enable the bank to utilize opportunities created by the digital transformation boom to improve the country’s financial sector.

Central Banks' Digital Currencies (CBDC) have gained momentum in the past few years, with six central banks having launched their own in recent years.

A digital form of a government-issued currency that is issued and regulated by a country’s central bank, CBDCs are considered the digital equivalent of physical cash and offer a variety of benefits.

CBDCs enable the government to increase transparency, reduce transaction costs, and enhance monetary policy tools for central banks, providing stronger levels of security and consumer protection compared to cryptocurrencies or other decentralized digital money.

A digital currency differs from UPIs (Unified Payments Interfaces) such as the CBE’s Instant Payment Network which allows instant transfer of money between bank accounts, and mobile money - which utilizes already available commercial banking-based accounting systems to manage digital transfers and wallets based on cash or lines of credit and loans.

 The six countries currently utilizing a CBDC are the Central Bank of The Bahamas (Sand Dollar), the Eastern Caribbean Central Bank (DCash), the Central Bank of Nigeria (e-Naira), the Bank of Jamaica (JamDex), People's Bank of China (Digital renminbi), the Reserve Bank of India (Digital Rupee), and Bank of Russia (Digital Ruble), according to Wikipedia.

Financial Inclusion

The document highlighting the government’s 2030 strategy shared a comprehensive overview of the state’s targets for the president’s latest six-year term, such as its goals to boost financial inclusion in the country and strategies to attract hard currency.

By 2030, Egypt aims to raise the rate of financial inclusion among Egyptians (aged 16+) to 100 percent, driven by financial services and digital payment systems. The document noted that, in mid-2023, financial inclusion data revealed a 67.3 percent rate.

The government is looking to increase the number of digital financial wallets to about 80 million by the end of the term from 34.3 million recorded in mid-2023.

The communication and information technology sector’s contribution to the GDP is projected to jump to 7 percent by 2030 according to the strategic document, compared to FY2021/2022’s 3.4 percent.

The government remains committed to improving digital inclusion overall, targeting an increase in mobile towers to reach 45,000 by the end of 2030, compared to around 31,000 in FY2022/2023.