Eritrea
Retail_Trading_Status
- Analysis ID
- #653
- Version
- Archived
- Created
- 2025-12-12 04:16
- Run
- 2947d930...
- History
- View all versions
- Workflow Stage
- Step 1
Executive Summary
Eritrea has no specific legislation explicitly regulating or banning cryptocurrencies; however, the country's strict command economy and foreign exchange controls create a de facto restricted environment. The Bank of Eritrea maintains a monopoly on all foreign currency transactions under Legal Notice 44/2000 and Proclamation No. 173/2013, which effectively prohibits the unauthorized holding or trading of foreign assets, a category that likely encompasses cryptocurrencies. While not explicitly criminalized by name, retail trading is practically impossible due to these legal restrictions and extremely limited internet infrastructure.
Key Pillars
Bank of Eritrea (Central Bank) - Sole authority for foreign exchange and monetary policy
Ministry of Finance - Oversees broader financial regulations
Strict Foreign Exchange Control Regime - Mandates use of Nakfa and surrender of foreign currency
Landmark Laws
Proclamation Pertaining to the Opening of Foreign Currency Deposit Accounts (Proclamation No. 173/2013) - Enacted: 2013-02-20
- Mandates that all domestic commercial transactions be settled in Nakfa. Strictly regulates the possession and transfer of foreign currency, requiring it to be held in authorized accounts.
- Source
Regulations in Respect to Foreign Exchange Transactions and Gold (Legal Notice No. 44/2000) - Enacted: 2000-07-01
- Establishes the Bank of Eritrea's monopoly on foreign exchange. Prohibits any entity other than the Bank or authorized dealers from transferring funds into or out of Eritrea.
- Source
Anti-Money Laundering and Combating Financing of Terrorism Proclamation (Proclamation No. 175/2014) - Enacted: 2014-01-01
- Criminalizes money laundering and financing of terrorism, providing a potential legal basis for prosecuting illicit crypto usage despite the lack of specific crypto laws.
Considerations
De Facto Ban: Strict capital controls mean purchasing crypto with Nakfa is legally impossible through formal channels.
Infrastructure Barriers: With internet penetration estimated around 7%, digital asset trading is inaccessible to the vast majority of the population.
Remittances: While crypto could theoretically aid remittances, the government strictly controls all inflows to capture foreign currency reserves.
Legal Uncertainty: The lack of specific 'crypto' laws does not imply freedom; the state's 'command economy' approach generally prohibits unsanctioned financial activities.
Notes
The 'Allowed-Unregulated' status suggested by some automated SEO-heavy websites is misleading. In a command economy like Eritrea, the absence of a permissive law usually implies prohibition, especially regarding financial assets. The date '2025-03-12' in some secondary sources appears to be a future-dated placeholder common in generated content; the underlying legal analysis relies on the 2013 and 2000 proclamations which are still in force.
Remaining Uncertainties
- Has the Bank of Eritrea issued any internal circulars specifically naming 'Bitcoin' or 'Cryptocurrency' that are not public?
- Are there any documented court cases where individuals were explicitly charged for holding crypto assets?
- Does the government actively monitor internet traffic for crypto-related protocols?
Full Analysis Report
Full Analysis Report
The regulatory status of cryptocurrency in Eritrea is best classified as a 'Gray-Zone' bordering on a de facto ban. Unlike jurisdictions that have explicitly legalized or criminalized digital assets, Eritrea has simply not addressed them in specific legislation. However, the country's broader financial legal framework is one of the most restrictive in the world. The Bank of Eritrea operates a strict command economy where the national currency, the Nakfa, is not freely convertible, and the government maintains a tight monopoly on all foreign exchange transactions.
Two primary pieces of legislation govern this restrictive environment: Legal Notice No. 44/2000 and Proclamation No. 173/2013. These laws mandate that all domestic transactions must be conducted in Nakfa and that any foreign currency entering the country must be declared and often surrendered to authorized dealers. Since cryptocurrency exchanges are not authorized dealers and crypto assets are generally viewed as foreign value stores, engaging in crypto trading would likely constitute a violation of these foreign exchange controls. There are no licensed Virtual Asset Service Providers (VASPs) in the country, and the government has not established any sandbox or licensing regime.
Practically, the environment for retail trading is hostile not just legally but infrastructurally. Eritrea has one of the lowest internet penetration rates globally, and the state monitors digital communications closely. This makes the operation of a crypto wallet or access to an offshore exchange difficult and risky for the average citizen. While there are anecdotal reports of the diaspora using informal channels (Hawala) for remittances, there is no evidence of a formal, state-sanctioned crypto remittance corridor.
International bodies like the IMF have noted Eritrea's 'semi-legal' parallel market for foreign exchange, but they also highlight the government's periodic crackdowns on these activities. Therefore, while a user might not be prosecuted under a specific 'Bitcoin Law,' they would face significant legal peril under general financial crimes and foreign exchange proclamations. The status remains 'Gray-Zone' because the prohibition is a byproduct of general capital controls rather than a targeted anti-crypto policy.
The regulatory status of cryptocurrency in Eritrea is best classified as a 'Gray-Zone' bordering on a de facto ban. Unlike jurisdictions that have explicitly legalized or criminalized digital assets, Eritrea has simply not addressed them in specific legislation. However, the country's broader financial legal framework is one of the most restrictive in the world. The Bank of Eritrea operates a strict command economy where the national currency, the Nakfa, is not freely convertible, and the government maintains a tight monopoly on all foreign exchange transactions. Two primary pieces of legislation govern this restrictive environment: Legal Notice No. 44/2000 and Proclamation No. 173/2013. These laws mandate that all domestic transactions must be conducted in Nakfa and that any foreign currency entering the country must be declared and often surrendered to authorized dealers. Since cryptocurrency exchanges are not authorized dealers and crypto assets are generally viewed as foreign value stores, engaging in crypto trading would likely constitute a violation of these foreign exchange controls. There are no licensed Virtual Asset Service Providers (VASPs) in the country, and the government has not established any sandbox or licensing regime. Practically, the environment for retail trading is hostile not just legally but infrastructurally. Eritrea has one of the lowest internet penetration rates globally, and the state monitors digital communications closely. This makes the operation of a crypto wallet or access to an offshore exchange difficult and risky for the average citizen. While there are anecdotal reports of the diaspora using informal channels (Hawala) for remittances, there is no evidence of a formal, state-sanctioned crypto remittance corridor. International bodies like the IMF have noted Eritrea's 'semi-legal' parallel market for foreign exchange, but they also highlight the government's periodic crackdowns on these activities. Therefore, while a user might not be prosecuted under a specific 'Bitcoin Law,' they would face significant legal peril under general financial crimes and foreign exchange proclamations. The status remains 'Gray-Zone' because the prohibition is a byproduct of general capital controls rather than a targeted anti-crypto policy.
Source Evidence
Primary and secondary sources cited in this analysis
"Unless the Bank of Eritrea specially authorizes payment in foreign currency, all payments relating to commercial transactions and contracts in Eritrea shall only be made in Nakfa."
"The Bank of Eritrea is responsible for all foreign exchange, and no other entity can transfer funds into or out of Eritrea."
"The GSE controls all foreign exchange, making it virtually the only legal source of imports... The Nakfa is not freely convertible."
"Eritrea has not yet developed specific laws or regulations regarding cryptocurrency. The government has generally maintained a cautious stance... with no legal recognition."
"No legal status for cryptocurrencies. 24 ICOs have restricted people from Eritrea taking part."
Web Sources (2)
Sources discovered via web search grounding
Search queries used (12)
- Eritrea cryptocurrency regulation status
- is bitcoin legal in Eritrea
- Eritrea virtual assets regulation
- Eritrea foreign exchange control proclamation crypto
- Bank of Eritrea bitcoin circular
- legal status of bitcoin in Eritrea 2024 2025
- Eritrea remittances cryptocurrency regulation
- Eritrea arrests bitcoin trading
- Bank of Eritrea warning cryptocurrency
- Legal Notice 44/2000 Eritrea foreign exchange
- Eritrea Proclamation No. 173/2013 text
- Bank of Eritrea monetary policy crypto
https://lawgratis.com/blog-detail/finance-law-in-eritrea
https://blog.upay.best/crypto-adoption/eritrea/