Borkena News Desk
TORONTO, Canada — In the latest string of announcements which is described rather as a “reiteration,” Ethiopia’s National Bank is sending a stern warning to the public on the use of virtual assets, including crypto, in transactions or otherwise.
The bank announced that “the use, purchase, sale, exchange, transfer, trading, settlement, and facilitation of transactions involving virtual assets are prohibited unless expressly authorized by the National Bank of Ethiopia under the existing legal framework.”
From the statement, it appears that the bank has left a loophole for the use of virtual assets without providing much detail. What is clear is that it can be done if the bank has granted “expressed” authorization.
The regulation is for all forms of virtual assets, not just cryptocurrencies. The bank’s statement noted, “…this prohibition is not limited to cryptocurrencies and extends to digital representations of value that can be electronically traded, exchanged, or used for payment, investment, or similar purposes.”
Regarding the scope of the restriction, it covers:
- Exchange between virtual assets and fiat currencies.
- Exchange between one or more forms of virtual assets.
- Transfer of virtual assets.
- Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.
- Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.
The bank warned that violation of these rules carries significant risks.
“The National Bank of Ethiopia therefore advises members of the public to refrain from engaging in any transactions and activities involving virtual assets as outlined above and avoid exposure to significant risks, including legal, fraud, scams, cyber-related threats, operational failures, market manipulation, and substantial losses,” it stated.
The bank first announced restrictions on P2P-paired P2P transactions earlier this year in February. However, the country has been providing energy infrastructure for large-scale bitcoin mining with the aim of generating foreign currency.
The bank has also been leading the implementation of macroeconomic reforms which were introduced in July 2024. Among the key policy changes was the introduction of a market-based forex regime—an action that led to what notable economists and reporters described as a “free fall of the Ethiopian currency.” US$1 was fetching about 57 Ethiopian birr at the time of the forex regime change. In less than six months after it, it lost over 100 percent of its value. Currently, it is exchanging at a rate of 157 birr in the banks and at well over 170 in the parallel market and going up.
The National Bank of Ethiopia has been introducing a series of monetary regulations with the aim to increase and promote fiscal discipline, as it claims.
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