Egypt and China have taken significant strides to deepen their financial relationship, with a focus on promoting the Chinese yuan and expanding digital payment systems. This strategic move aims to bolster bilateral trade, facilitate cross-border payments, and reduce reliance on the US dollar, fostering greater economic independence for both nations. The Central Bank of Egypt (CBE) Governor Hassan Abdullah welcomed his Chinese counterpart, Pan Gongsheng, to Cairo, initiating discussions on key financial sectors. Their talks centered on expanding currency swap arrangements, promoting local currency settlements, and enhancing interbank payment systems, all within the framework of their long-standing strategic partnership.

During these high-level discussions, both sides emphasized the critical importance of boosting mutual investment, increasing the presence of Chinese banks in Egypt and Egyptian banks in China, and leveraging cooperation in emerging financial technologies. Specific topics included the potential for Egypt’s issuance of “Panda” bonds in the Chinese market and the linking of their respective payment systems. Governor Abdullah highlighted the visit as a significant step, opening new avenues for knowledge exchange, supporting financial stability, and advancing sustainable development goals for both countries.

A major outcome of the meeting was the signing of three Memorandums of Understanding (MoUs), signaling a robust push toward digital and cross-border financial integration. The first was a tripartite MoU involving Egypt’s Suez Canal Bank, China-Africa TEDA Investment Company, and CIPS Co., Ltd. – the operator of China’s Cross-Border Interbank Payment System. This agreement aims to promote and encourage the use of the Chinese yuan within the Egypt-China Economic and Trade Cooperation Zone, streamlining financial operations and supporting trade.

Further enhancing digital payment infrastructure, China’s UnionPay signed two crucial protocols. The first was with Egypt’s Electronic Banking Services Company (EBC), designed to improve electronic payment infrastructure and expand the acceptance of UnionPay cards across the Egyptian market, covering both physical points of sale and e-commerce platforms. The second UnionPay agreement was signed with Egypt-based fintech company Paymob, focusing on cooperation in marketing electronic payment acceptance services for UnionPay cardholders, thereby enhancing digital merchant solutions.

These comprehensive initiatives are intended to modernize Egypt’s payments ecosystem, foster local currency trade, and streamline financial operations between Egyptian and Chinese institutions. They underscore the shared vision of economic integration and support the two nations’ sustainable development agendas. The increasing use of the Yuan is expected to offer several benefits, including reduced transaction costs by eliminating the need for dollar conversion, mitigated exchange rate risk, strengthened financial independence, and facilitated access to Yuan-denominated trade finance options for businesses. Several Egyptian banks, including the National Bank of Egypt and Banque Misr, have already begun offering Yuan-denominates accounts and services.

Beyond the CIPS system, both countries are exploring other innovative payment solutions, such as the integration of popular Chinese digital wallets like Alipay and WeChat Pay for tourism and e-commerce, the utilization of blockchain technology for secure and transparent cross-border transactions, and potential future collaboration on Central Bank Digital Currencies (CBDCs). This diversified approach is expected to have a significant positive impact on the Egyptian economy through increased foreign investment, a boost to tourism, enhanced trade competitiveness for Egyptian exports, and a diversification of Egypt’s financial system, particularly within the Suez Canal Economic Zone (SCZone). This strategic strengthening of financial ties comes amid Egypt’s broader drive to enhance its global financial partnerships and China’s continued effort to reinforce its economic footprint across the Middle East and Africa, with China having been Egypt's largest trading partner for the past decade.