Ethiopia’s National Bank considers guidelines for cryptocurrency use

The National Bank of Ethiopia (NBE) may soon release guidelines permitting the use of "crypto assets" and digital currencies, according to Governor Mamo Meheretu. Speaking during a session of the House of Peoples' Representatives on December 17, 2024, Governor Meheretu indicated that the NBE is considering the move in response to global trends in central banking, monetary policy, and financial management. However, no specific timeline has been provided for these potential regulatory changes.

Currently, the use of cryptocurrencies as a form of payment remains illegal in Ethiopia unless explicitly approved by the NBE. The recently amended National Bank of Ethiopia Proclamation explicitly prohibits cryptocurrency payments and imposes penalties of up to three years imprisonment and fines of up to 10,000 birr for violations.

Despite the prohibition, Ethiopia has seen investments in crypto mining and data centers, signaling interest in the sector. Governor Meheretu noted that the NBE is closely monitoring international developments and may issue directives in the future if it aligns with the country's monetary objectives.

Cryptocurrencies, powered by encryption technologies, serve as both a currency and a virtual accounting system, requiring a digital wallet for use. While Ethiopia's current laws are restrictive, NBE’s acknowledgment of potential future regulations suggests a cautious approach toward adopting digital financial innovations.