The Egyptian pound didn’t become the world’s top currency. It became one of the world’s most battered ones.

In March 2026, the USD/EGP exchange rate peaked at approximately 54.86, marking a record low for the pound against the dollar. The culprit: an oil price shock fueled by geopolitical instability in the Middle East, particularly surrounding Iran, that has turned Egypt’s status as a net energy importer into an acute financial liability.

The pound depreciated by roughly 8-14% during the early phases of these tensions. And while a modest recovery brought the rate back to around 50 EGP per dollar by mid-June, the damage to Egypt’s balance of payments has been severe. Every $10 increase in oil prices adds approximately $2.5 billion to Egypt’s import bill.

A central bank choosing flexibility over defense

In past crises, Egypt’s central bank burned through foreign reserves to defend currency pegs. This time, the Central Bank of Egypt has taken a different approach, permitting greater exchange-rate flexibility and letting the pound find its own level.

In 2024, Egypt undertook a significant currency float that led to a 38-40% depreciation against the dollar. That earlier adjustment was painful but deliberate, designed to unlock IMF funding and attract foreign investment. The current slide, by contrast, is being driven by external forces that Egypt can’t negotiate away.

Crypto interest rises, but regulatory walls remain high

Interest in cryptocurrencies, particularly Bitcoin, has surged among Egyptian investors looking for hedges against the pound’s decline. But Egypt’s regulatory environment throws cold water on that enthusiasm. The country maintains a ban on unlicensed crypto activities, making formal adoption difficult and pushing whatever demand exists into informal channels.

Historical data also complicates the hedge narrative. Bitcoin has not reliably acted as a safeguard against EGP devaluations. During the 2024 float, global crypto markets had their own volatility to contend with, meaning Egyptian investors who moved into Bitcoin weren’t necessarily better off than those who stayed in pounds.

The e-Pound and Egypt’s long game

Egypt has a central bank digital currency in development, dubbed the e-Pound, with a planned rollout by 2030. The stated goal is to provide a state-controlled digital alternative that captures some of the convenience benefits of crypto without the regulatory headaches of decentralized assets.

Egypt is the Arab world’s most populous country, with over 100 million people. The regulatory stance means that potential crypto adoption remains largely theoretical for now.