Eritrea
Retail_Trading_Status
Status Changed
Previous status: Gray-Zone
Reconciled from live analysis after human review confirmed status as Unclear. Original new analysis incorrectly classified as Gray-Zone. The live analysis, supported by external validation, indicates no specific regulation but a restrictive environment, leading to uncertainty. Latest analysis provided additional factual laws and considerations that support the unclear status by highlighting foreign exchange controls and lack of specific crypto laws, without contradicting the live analysis.
- Analysis ID
- #850
- Version
- Latest
- Created
- 2025-12-13 07:04
- Run
- 2947d930...
- History
- View all versions
- Workflow Stage
- Reconciled
Executive Summary
As of December 2025, Eritrea's regulatory stance on retail cryptocurrency trading remains unclear due to the absence of specific legislation and a highly restrictive financial environment. There is no dedicated regulatory body for cryptocurrencies, and no permissions or authorizations are required, but stringent foreign exchange controls under laws like Proclamation No. 173/2013 and Legal Notice No. 44/2000 mandate all transactions in the national currency, Nakfa, and restrict foreign asset holdings, implicitly limiting crypto activities. The Bank of Eritrea maintains a monopoly on foreign exchange, and poor internet infrastructure further hinders practical adoption. While cryptocurrencies are not explicitly banned, the lack of clear regulation combined with these controls creates significant uncertainty.
Key Pillars
- Absence of a Dedicated Regulatory Body: No specific governmental or financial institution oversees cryptocurrencies; the Bank of Eritrea regulates traditional finance but not digital assets.
- No Specific Permission or Authorization: No licenses or authorizations are required for cryptocurrency trading, but this lack of regulation means no formal oversight or consumer protection.
- Restrictive Financial Environment: Eritrea maintains stringent foreign exchange controls, requiring all domestic transactions in Nakfa and restricting foreign currency, which impacts crypto utility.
- Bank of Eritrea Monopoly: The central bank has sole authority over foreign exchange under Legal Notice No. 44/2000, prohibiting unauthorized transfers into or out of Eritrea, affecting crypto transactions.
- Legal Framework Gaps: No specific laws address cryptocurrencies, but general financial and anti-money laundering laws create implicit barriers.
Landmark Laws
- Proclamation No. 32/1993 (Regulating the Eritrean Monetary and Banking System): Authority: Bank of Eritrea; Date: 1993; Summary: Established the Bank of Eritrea and mandates all transactions in Eritrea be made in local currency, the Nakfa.
- Proclamation No. 173/2013 Pertaining to the Opening of Foreign Currency Deposit Accounts: Authority: Government of Eritrea; Date: 2013-02-20; Summary: Requires all domestic commercial transactions to be settled in Nakfa unless specifically authorized by the Bank of Eritrea, and strictly regulates foreign currency possession.
- Legal Notice No. 44/2000 Regulations in Respect to Foreign Exchange Transactions and Gold: Authority: Bank of Eritrea; Date: 2000-07-01; Summary: Establishes the Bank of Eritrea's monopoly on foreign exchange, prohibiting any entity other than the Bank or authorized dealers from transferring funds into or out of Eritrea.
- Investment Proclamation No. 59/1994: Authority: Government of Eritrea; Date: 1994; Summary: Aims to encourage investment but does not address digital assets; foreign exchange allocations are subject to Bank of Eritrea regulations.
- Anti-Money Laundering and Combating Financing of Terrorism Proclamation No. 175/2014: Authority: Government of Eritrea; Date: 2014-01-01; Summary: Criminalizes money laundering and financing of terrorism, providing a potential legal basis for prosecuting illicit crypto usage.
Considerations
- Asset Classification: Cryptocurrencies are generally regarded as legal but not explicitly defined in law; tax classification as property or assets is unclear.
- Taxation: No specific tax laws for cryptocurrencies; general tax principles may apply, with potential capital gains or income tax depending on use.
- Foreign Exchange Controls: Strict controls and non-convertible Nakfa severely limit the practical use of cryptocurrencies for international transactions or remittances.
- Financial Infrastructure and Access: Poor internet and electricity supply, with low internet penetration, hinder widespread crypto adoption and trading.
- Consumer Protection: No specific consumer protection frameworks for crypto users, leaving individuals and businesses at risk.
- Practical Barriers: The command economy and government monitoring make crypto trading difficult and risky, despite no explicit ban.
- Legal Uncertainty: Absence of specific crypto laws combined with restrictive general laws creates an ambiguous regulatory environment.
Notes
- There are no public proposals or pilot programs specifically related to cryptocurrency regulation or adoption in Eritrea.
- Some online sources, such as UEEx Technology, indicate that cryptocurrency exchanges are legal to operate but unregulated, but this occurs within a severely restricted financial environment.
- The 'Allowed-Unregulated' status suggested by some sources is misleading due to Eritrea's command economy and foreign exchange controls.
- The government's stance appears cautious, focusing on maintaining control over the financial system, with no clear guidance on digital assets.
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?
Detailed Explanation
Detailed Explanation
As of December 2025, Eritrea's regulatory stance on retail cryptocurrency trading is officially unclear due to the absence of specific legislation, operating within a highly restrictive financial environment. There is no dedicated regulatory body overseeing digital assets, and no specific permissions or authorizations are required to trade cryptocurrencies. However, this lack of formal prohibition does not equate to a permissive environment. The overarching legal framework, characterized by stringent state control over finance, creates significant implicit barriers. Key legislation, including Proclamation No. 32/1993 and Proclamation No. 173/2013, mandates that all domestic commercial transactions be conducted in the national currency, the Nakfa, unless specifically authorized by the Bank of Eritrea. This directly impacts the utility of cryptocurrencies for local commerce. Furthermore, Legal Notice No. 44/2000 establishes the Bank of Eritrea's monopoly on foreign exchange, prohibiting any unauthorized transfer of funds into or out of the country, which severely limits the ability to use cryptocurrencies for cross-border transactions or remittances. The regulatory landscape is further complicated by the Anti-Money Laundering and Combating Financing of Terrorism Proclamation No. 175/2014, which provides a legal basis for prosecuting illicit activities involving digital assets. The combination of these laws, designed for a command economy, creates a de facto restrictive environment for cryptocurrency activities, despite the absence of an explicit ban. Practical adoption is also severely hindered by poor internet infrastructure and low internet penetration, which act as significant barriers to entry and widespread use. Consumer protection frameworks are non-existent for crypto users, leaving individuals and businesses exposed to risk in an unregulated space. The government's cautious stance appears focused on maintaining strict control over the financial system, with no public proposals or pilot programs to suggest a shift in policy. Consequently, while some online sources may describe the status as 'Allowed-Unregulated,' this is misleading given the severe operational constraints imposed by foreign exchange controls and the legal requirement to transact in Nakfa.
Summary Points
I. Regulatory Status
* Status is unclear as of December 2025.
* No specific legislation explicitly bans or regulates cryptocurrencies.
* Operates within a highly restrictive financial environment with stringent foreign exchange controls.
* Some online sources indicate exchanges are legal but unregulated, but this is misleading due to the command economy.
II. Key Regulatory Bodies
* No dedicated regulatory body for cryptocurrencies.
* The Bank of Eritrea regulates traditional finance and holds a monopoly on foreign exchange, indirectly impacting crypto activities.
III. Important Legislation
* Proclamation No. 32/1993 (Regulating the Eritrean Monetary and Banking System): Established the Bank of Eritrea and mandates all transactions in Eritrea be made in the local currency, Nakfa.
* Proclamation No. 173/2013 Pertaining to the Opening of Foreign Currency Deposit Accounts: Requires all domestic commercial transactions to be settled in Nakfa unless authorized by the Bank of Eritrea; strictly regulates foreign currency possession.
* Legal Notice No. 44/2000 Regulations in Respect to Foreign Exchange Transactions and Gold: Establishes the Bank of Eritrea's monopoly on foreign exchange, prohibiting unauthorized transfers of funds into or out of Eritrea.
* Anti-Money Laundering and Combating Financing of Terrorism Proclamation No. 175/2014: Criminalizes money laundering and financing of terrorism, providing a potential legal basis for prosecuting illicit crypto usage.
* Investment Proclamation No. 59/1994: Aims to encourage investment but does not address digital assets; foreign exchange allocations are subject to Bank of Eritrea regulations.
IV. Compliance Requirements
* No specific permissions or authorizations (e.g., licenses) are required for cryptocurrency trading due to the lack of regulation.
* General compliance with existing financial laws, particularly foreign exchange controls and anti-money laundering statutes, is implicitly required.
V. Notable Restrictions or Limitations
* Foreign Exchange Controls: Strict controls and a non-convertible Nakfa severely limit the practical use of cryptocurrencies for international transactions or remittances.
* Currency Mandate: Legal requirement for domestic transactions to be in Nakfa creates a fundamental barrier to crypto's utility as a medium of exchange.
* Financial Infrastructure and Access: Poor internet and electricity supply, with low internet penetration, hinder widespread adoption and trading.
* Consumer Protection: No specific consumer protection frameworks exist for crypto users.
* Legal Uncertainty: Absence of specific crypto laws combined with restrictive general laws creates an ambiguous and risky environment.
* Asset & Tax Classification: Cryptocurrencies are not explicitly defined in law; tax treatment (e.g., as capital gains or income) is unclear.
VI. Recent Developments or Notes
* There are no public proposals or pilot programs specifically related to cryptocurrency regulation or adoption.
* The government's stance appears cautious, focused on maintaining control over the financial system.
* The 'Allowed-Unregulated' status suggested by some sources is considered misleading due to Eritrea's command economy and foreign exchange controls.
Full Analysis Report
Full Analysis Report
Retail Trading Status: Eritrea
Date: 2025-06-26
Topic: Retail_Trading_Status
Description: Assess whether individual citizens and residents in Eritrea are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity.
1. Current Status
Unclear
2. Detailed Narrative Explanation
Eritrea's regulatory stance on retail cryptocurrency trading is unclear. There is no specific legislation explicitly regulating or banning cryptocurrencies. However, the country's strict financial laws, including Proclamation No. 173/2013 and Legal Notice No. 44/2000, impose stringent foreign exchange controls that mandate all transactions in the national currency, Nakfa, and require Bank of Eritrea authorization for foreign currency use. This creates a de facto restrictive environment for crypto trading. The Bank of Eritrea has not issued any crypto-specific regulations, and there is no dedicated regulatory body. While some sources suggest cryptocurrencies are legal but unregulated, the absence of clear rules combined with practical barriers like low internet penetration makes the status ambiguous. The government's cautious approach and control over the financial system further contribute to uncertainty.
3. Relevant Text Excerpts
- Proelium Law LLP: "Eritrea. Undecided. No legal status for cryptocurrencies. 24 ICOs have restricted people from Eritrea taking part. There is no cryptocurrency regulation."
- UEEx Technology: "Cryptocurrency exchange providers are legal to operate in Eritrea but are unregulated. However, the limitation and regulation of the internet in the country are affecting their operations."
- Proclamation No. 173/2013: "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."
- Legal Notice No. 44/2000: "The Bank of Eritrea is responsible for all foreign exchange, and no other entity can transfer funds into or out of Eritrea."
- UPay Blog: "Cryptocurrencies are legal and unregulated in Eritrea... The absence of regulation has created a gray area leaving businesses and individuals who utilize and patronize these digital assets at their peril."
4. Direct URL Links
- Proelium Law LLP: https://www.proeliumlaw.com/crypto-regulation-tracker/
- UEEx Technology: https://www.ueex.com/blog/best-crypto-exchanges-in-eritrea-in-2025-2025042502/
- Proclamation No. 173/2013: http://www.eritreaembassy-japan.org/data/Proclamation_No_173_2013_1.pdf
- Legal Notice No. 44/2000: https://www.loc.gov/item/2011349474/
- UPay Blog: https://upay.africa/blog/crypto-adoption-around-the-world-eritrea/
- Heavnn University: https://heavnn.university/cryptocurrency-taxes-in-eritrea/
- XDAfrica: https://xdafrica.com/crypto-gambling-eritrea/
- Additional sources from Live analysis: https://invezz.com/exchange/eritrea/, https://www.bitrawr.com/buy-bitcoin/eritrea, https://www.brokerchooser.com/find-my-broker/crypto-broker/best-crypto-brokers-in-eritrea, https://asinko.com/buy-bitcoin-in-eritrea/, https://skillsforafrica.org/course/blockchain-and-cryptocurrency-in-financial-services-transforming-the-financial-landscape-eritrea/, https://seriousmarkets.com/best-cryptocurrency-trading-platforms-eritrea/, https://spectrocoin.com/en/bitcoin-price-in-eritrea-er, https://pursa.co/sell-bitcoin-in-eritrea-with-us-bank-transfer, https://uk.investing.com/central-banks/bank-of-eritrea, https://ng.investing.com/central-banks/bank-of-eritrea, https://plasbit.com/blog/the-benefits-of-crypto-debit-cards-in-eritrea/, https://lawgratis.com/finance-law-in-eritrea/
## Retail Trading Status: Eritrea **Date:** 2025-06-26 **Topic:** Retail_Trading_Status **Description:** Assess whether individual citizens and residents in Eritrea are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity. ### 1. Current Status **Unclear** ### 2. Detailed Narrative Explanation Eritrea's regulatory stance on retail cryptocurrency trading is unclear. There is no specific legislation explicitly regulating or banning cryptocurrencies. However, the country's strict financial laws, including Proclamation No. 173/2013 and Legal Notice No. 44/2000, impose stringent foreign exchange controls that mandate all transactions in the national currency, Nakfa, and require Bank of Eritrea authorization for foreign currency use. This creates a de facto restrictive environment for crypto trading. The Bank of Eritrea has not issued any crypto-specific regulations, and there is no dedicated regulatory body. While some sources suggest cryptocurrencies are legal but unregulated, the absence of clear rules combined with practical barriers like low internet penetration makes the status ambiguous. The government's cautious approach and control over the financial system further contribute to uncertainty. ### 3. Relevant Text Excerpts - **Proelium Law LLP:** "Eritrea. Undecided. No legal status for cryptocurrencies. 24 ICOs have restricted people from Eritrea taking part. There is no cryptocurrency regulation." - **UEEx Technology:** "Cryptocurrency exchange providers are legal to operate in Eritrea but are unregulated. However, the limitation and regulation of the internet in the country are affecting their operations." - **Proclamation No. 173/2013:** "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." - **Legal Notice No. 44/2000:** "The Bank of Eritrea is responsible for all foreign exchange, and no other entity can transfer funds into or out of Eritrea." - **UPay Blog:** "Cryptocurrencies are legal and unregulated in Eritrea... The absence of regulation has created a gray area leaving businesses and individuals who utilize and patronize these digital assets at their peril." ### 4. Direct URL Links - Proelium Law LLP: https://www.proeliumlaw.com/crypto-regulation-tracker/ - UEEx Technology: https://www.ueex.com/blog/best-crypto-exchanges-in-eritrea-in-2025-2025042502/ - Proclamation No. 173/2013: http://www.eritreaembassy-japan.org/data/Proclamation_No_173_2013_1.pdf - Legal Notice No. 44/2000: https://www.loc.gov/item/2011349474/ - UPay Blog: https://upay.africa/blog/crypto-adoption-around-the-world-eritrea/ - Heavnn University: https://heavnn.university/cryptocurrency-taxes-in-eritrea/ - XDAfrica: https://xdafrica.com/crypto-gambling-eritrea/ - Additional sources from Live analysis: https://invezz.com/exchange/eritrea/, https://www.bitrawr.com/buy-bitcoin/eritrea, https://www.brokerchooser.com/find-my-broker/crypto-broker/best-crypto-brokers-in-eritrea, https://asinko.com/buy-bitcoin-in-eritrea/, https://skillsforafrica.org/course/blockchain-and-cryptocurrency-in-financial-services-transforming-the-financial-landscape-eritrea/, https://seriousmarkets.com/best-cryptocurrency-trading-platforms-eritrea/, https://spectrocoin.com/en/bitcoin-price-in-eritrea-er, https://pursa.co/sell-bitcoin-in-eritrea-with-us-bank-transfer, https://uk.investing.com/central-banks/bank-of-eritrea, https://ng.investing.com/central-banks/bank-of-eritrea, https://plasbit.com/blog/the-benefits-of-crypto-debit-cards-in-eritrea/, https://lawgratis.com/finance-law-in-eritrea/
Source Evidence
Primary and secondary sources cited in this analysis
"This proclamation, along with its amendment (Proclamation No. 93/1997), established the Bank of Eritrea and regulates the country's monetary and banking system. It mandates that all transactions in Eritrea be made in local currency, the Nakfa."
"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."
"Criminalizes money laundering and financing of terrorism, providing a potential legal basis for prosecuting illicit crypto usage."
"Eritrea. Undecided. No legal status for cryptocurrencies. 24 ICOs have restricted people from Eritrea taking part. There is no cryptocurrency regulation."
"Cryptocurrency exchange providers are legal to operate in Eritrea but are unregulated. However, the limitation and regulation of the internet in the country are affecting their operations."
"Cryptocurrencies are legal and unregulated in Eritrea... The absence of regulation has created a gray area leaving businesses and individuals who utilize and patronize these digital assets at their peril."
"Eritrea has not yet developed specific laws or regulations regarding cryptocurrency. The government has generally maintained a cautious stance... with no legal recognition."
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/