Ethiopia’s Central Bank Warns of “Illegal” use of Crypto

Key Takeaways

  • Ethiopia’s Central Bank reiterated that cryptocurrency is not officially recognized in the country.
  • NBE states crypto is being used for money laundering and illegal financial transactions.

Ethiopia’s Central Bank, The National Bank of Ethiopia (NBE), has stated that it is illegal to conduct business with cryptocurrencies, according to a report from Ethiopian state media outlet Fana Broadcasting Corporate (FBC). According to reports, NBE stated that people are using crypto for “informal financial transactions and money laundering schemes”.

The monetary authority reiterated its stand that any financial transaction happening in anything other than Birrs-Ethiopia’s national currency is illegal according to the law.NBE reportedly stated that crypto provided ideal circumstances for the concealment of illegal cash. The financial institution further stressed that no officially recognized cryptocurrency exchange exists in Ethiopia.

The bank also encouraged citizens to abstain from using cryptocurrencies and report “illegal” crypto activity to authorities. The National Bank of Ethiopia (NBE) said it would take legal actions against anyone found to be using cryptocurrencies for financial transactions in the country. The announcement comes as Octagon Networks, a leading cybersecurity firm based in Ethiopia’s capital Addis Ababa, converted all of its liquid assets to BTC.

Despite NBE’s rigid stance against crypto, it is still unsure about whether or not businesses are transacting in bitcoin for their goods and services in the country. NBE, while acknowledging the “increasingly prevalent” use of bitcoin, is yet to release the category of users that are transacting using crypto. The country’s high inflation rate is expected to have incentivized many people to try their hand at cryptocurrency, including Bitcoin

African countries have always had a mixed response when it comes to accepting digital assets. In April 2022, the Central African Republic, grabbed news headlines as it embraced bitcoin as legal tender. The Central African Republic is now working on building various forms of infrastructure for embedding crypto into the economy. In 2021, Nigeria introduced its own central bank digital currency, the eNaira. Crypto’s popularity in the African Subcontinent was reinstated with Kenya earning a place as one of the top locations for peer-to-peer crypto exchange.

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Saniya Raahath

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