Ethiopia’s national bank warns bitcoin is illegal

Last Updated: 7 June 2022

The National Bank of Ethiopia (NBE) writes in a statement that all transactions in the country must be done with the Birr, the local currency. This makes (or keeps) bitcoin an illegal means of payment.

Ethiopia

There are exceptions, if allowed by banks. It is specifically stated that the use of bitcoin is against the law. The Ethiopian outlet Addis Standard reports that bitcoin is considered illegal in the African country.

Ethiopia’s central bank warns against trading in cryptocurrencies. The National Bank said today that cryptocurrencies like bitcoin are growing in prevalence in Ethiopia despite being contrary to the country’s laws & that this is creating favorable conditions to hide illicit funds pic.twitter.com/0OAzvGZsGv

— Farhan Jimale (@farhanjimale) June 6, 2022

The NBE acknowledges that the use of bitcoin and other cryptocurrencies is becoming more accessible. However, they warn that they have never given permission for the use of crypto-currencies. In addition, they warn that those who use it can expect repercussions.

There are also some arguments: crypto-currencies would be perfect for ‘hiding’ illegal money. It would also be used for money laundering and ‘unauthorised financial transactions’.

Radio station Sheger 102.1 FM says the following about the central bank’s statements:

“One is aware of the illegality of this act. We urge you to report it to the National Bank and relevant law enforcement agencies.”

Money transfers

In Ethiopia, no “money transfers” are allowed at all without the approval of the National Bank. This is all explained in the Payment System Proclamation No. 718/2003.

Since the National Bank of Ethiopia does not recognise the use of virtual money, it is considered illegal.

Bitcoin is a competitor of central banks: money creation is beyond the reach of bankers, which therefore creates an opposite interest. So this view of crypto-currencies is not very crazy.

Remarkably, earlier this week it came out that Octagon Networks, a cyber security company operating mainly from the Ethiopian capital Addis Ababa, has switched to a bitcoin standard.