The Central Bank in Egypt announced that they are currently discussing the possibility of substituting cryptocurrencies with electronic currencies. The bank explained in its report that they are talking over the strategy to launch digital currencies, indicating that it has built internal and external working commissions, which include members of Egyptian ministries and authorities to discuss the application of economic currencies.
This motion serves Egypt’s attempts to overcome the foreign currency crisis, which halted importing goods in Egypt. That in turn, caused the prices to significantly, increase. For his part, the executive council of the International Monetary Fund (IMF) approved a financial support package for the state of $3B worth for 46 months.
There’s a direct link between the Extended Fund Facility program (EFF) and the approved package, which predicts an abiding transition to a monetary policy that focuses on reducing inflation, debt management, fiscal consolidation, flexible exchange rates, facilitating private sector-led growth, far-reaching structural reforms to reduce the state’s footprint, foster a level playing field among all economic actors, and strengthen governance and transparency in the public sector.
In 2016, Egypt liberalized its national currency, yet enforcing the exchange rate within the fluctuation band to escape further fluctuations has proven damaging to the country’s economy.
The main focus of using digital currency is to restore the macroeconomic stability of Egypt, its reserves, and improve resilience to shocks, and lay the foundation for inclusive growth led by the private sector.