Ethiopia is making a U-turn on its cryptocurrency regulation, warning that Bitcoin payments are not legal in the country.
The National Bank of Ethiopia (NBE) has issued an official statement on cryptocurrencies. In it, it warns that All transfers and financial transactions in the country must be made using the Birr, the official currency of the country, unless the central entity expressly permits the use of other means.
The Bank's statement calls Bitcoin is “illegal” and its use is prohibited, as well as any other cryptocurrency.
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Regarding cryptocurrencies, the BNE statement notes that official permission has never been given for their use in the country and warns that anyone who uses them is breaking the law.
Sheger 102.1 FM, one of the country's leading radio stations, echoed the statement and extended the warning expressly requesting the population to stop making transactions in cryptocurrencies and to inform the competent authorities if they are aware of any illegal transaction.
Moreover, the Proclamation of the Payment System No. 718/2003 It notes that no transfers can be made in Ethiopia without the express permission of the National Bank of Ethiopia, so this warning is somewhat redundant.
The NBS does not recognise the use of digital money for commerce or payments, so the bank believes the public should be protected from such illegal operations.
A change in the country's cryptocurrency policy
This decision has surprised users in the area, as it was expected that Ethiopia would follow in the footsteps of its neighbor. Central African Republic, creating a legal framework favorable to cryptography. Some even expected the country to approve a regulation to make it Bitcoin legal tender.
Until now, Ethiopia has maintained a cryptocurrency-friendly policy. In April 2021, the government implemented a Digital identification system for students, developed by Input-Output Global, the company responsible for the Cardano blockchain.
The National Bank of Ethiopia's announcement could put the brakes on Cardano's plans to implement a payment network in the country before expanding to the rest of the African continent.
It is curious that the warning from the National Bank of Ethiopia appears together with the news that Octagon Networks, which operates from the capital Addis Ababa, has completed the process of converting its liquid assets and entire balance sheet into Bitcoin.
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