Egypt is moving to test blockchain technology in regulated investment products. The Financial Regulatory Authority (FRA) is granting preliminary approval for Tarmiiz Information Technology to join its Regulatory Sandbox with a money market fund tokenization project in cooperation with GRANITE Financial Holding.

“This initiative is a natural extension of Granite’s strategy to harness technology in advancing liquidity management and investment solutions,” said Hisham Akram, Founder and Chief Executive Officer of Granite Financial Holding.

The project aims to develop a digital platform based on asset tokenization technology, allowing assets, particularly investment fund units. It will test an operational model for tokenizing money market funds. Moreover, it aims to establish a commercially viable operational and regulatory framework in coordination with the FRA.

Why You Should Care

The significance of the project is not simply that a traditional financial product is being put on blockchain infrastructure. It gives Egypt an opportunity to test the regulatory and operational requirements for digital representations of financial assets before any wider market rollout.

Under the project, tokenization could support the issuance, transfer and redemption of investment fund units, as well as the management of an asset throughout its lifecycle. The approach intends to improve the efficiency and transparency of these processes.

For Egypt’s capital markets, that creates a controlled testing ground for assessing whether blockchain can complement existing financial infrastructure while maintaining regulatory oversight, market stability and investor protections.

The Details

Tarmiiz will contribute its blockchain and asset tokenization infrastructure. Meanwhile, GRANITE is exploring the technology as part of its broader focus on technology-enabled liquidity management and investment solutions.

“This project marks an important milestone for Tarmiiz, providing an opportunity to validate asset tokenization applications within a supportive regulatory environment and demonstrating the technology’s readiness for commercial deployment,” said Amr Soliman, Chairman & Co-Founder of Tarmiiz.

The model is designed to digitally represent assets, particularly investment fund units, through a controlled electronic ledger. The companies will work with the FRA to test the regulatory and operational framework needed to determine whether the model can become commercially viable.

The distinction is important. The FRA’s approval is preliminary and limited to the Regulatory Sandbox. This means that the project is being tested under a controlled regulatory environment rather than receiving broad authorization for commercial deployment.

The approval is part of a wider push by the FRA to create a flexible environment for financial technology. So far, the Sandbox has received more than 50 projects during its first year, with nine projects receiving preliminary approval and two already moving into actual testing.

The Ripple

If the tokenization model proves workable, its relevance could extend beyond money market funds.

A functioning framework could provide a reference point for applying digital asset ownership infrastructure to other financial products and processes. The FRA specifically identified potential applications in improving the integrity and reliability of financial asset records and enabling tokenized assets to support the settlement of financial transactions.

That could give asset managers, fintech companies and other participants in Egypt’s non-banking financial sector a clearer regulatory pathway for experimenting with blockchain-based infrastructure.

The project also places the regulator at the center of that development. Rather than allowing the technology to evolve separately from financial regulation, the Sandbox gives the FRA an opportunity to assess its practical implications while maintaining oversight of the products and participants involved.

The timing is also notable. The FRA is preparing to hold its annual FRA Sandbox Summit on September 7, where it will review the Sandbox’s first year, showcase projects it has supported, and discuss the role of financial technology in developing non-banking financial products and services.

What to Watch

The immediate focus will be on the testing phase within the FRA Sandbox and the development of the regulatory and operational framework for the tokenization model. 

The project will therefore provide an opportunity to assess how digital representations of fund units can support the issuance, transfer, redemption and management of financial assets within a controlled regulatory environment. The companies are also expected to work with the FRA on determining whether the model can become commercially viable.