Ethiopia’s Central Banks Says Cryptocurrency Payments Are Illegal

The National Bank of Ethiopia (NBE) has revealed that it never gave authorization for cryptocurrencies to be used in the country as payment methods, local media reported Monday.

Crypto Payments Illegal in Ethiopia

The central bank tagged cryptocurrencies as illegal and warned citizens against using them for payments. The NBE further stated that all financial transactions within the country should be made using the country’s native currency, the Ethiopian Birr (ETB).

The bank also noted that transactions made with other payment methods aside from ETB need to be reported for authorization. This is according to the country’s Payment System Proclamation No. 718/2003, which requires the central bank to give approval before any money transfer or financial service takes place.

NBE claims it frowns against crypto adoption because digital assets have become a hub for illegal transactions. As such, anyone who facilitates payments with crypto would face the consequences.

Ethiopians React

The latest statement from Ethiopia’s central bank received a lot of disapproval and criticism from citizens. While many believe that the country needs to adopt cryptocurrencies as it is a new technology that can bolster the economy, others noted that the government cannot restrict people from using crypto assets due to their decentralized nature. 

Meanwhile, the NBE’s statement comes just two days after Ethiopia-based cybersecurity company Octagon Network converted its entire balance sheet into Bitcoin, while still accepting BTC payments with a 50% discount for its services. 

Crypto Adoption on the Rise

While Ethiopia has taken a rigid stance against crypto, the Central African Republic (CAR) has embraced cryptocurrency adoption, making it the first in Africa and the second in the world to adopt Bitcoin as legal tender.

El Salvador became the first country in the world to officially legalize bitcoin as a national currency in June 2021. Since then, the country has been bullish on the leading cryptocurrency despite criticism from global regulators.