## Retail_Trading_Status: Ethiopia

**Report Date:** 2025-06-26

**Topic:** Retail_Trading_Status
**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

**1. Current Status:** **Banned**

**2. Detailed Narrative Explanation:**

Retail cryptocurrency trading, including the buying, selling, and holding of cryptocurrencies for transactional purposes by individual citizens and residents, is currently **banned** in Ethiopia. The National Bank of Ethiopia (NBE), the country's central bank, has explicitly stated that the Ethiopian Birr (ETB) is the sole legal tender in the country and that all financial transactions must be conducted in Birr.

In June 2022, the NBE issued a strong warning, declaring that the use of Bitcoin and other digital currencies for transactions is illegal and that violators would face legal measures. This stance was legally reinforced by the National Bank of Ethiopia Proclamation No. 1359/2024, enacted on June 14, 2024, which officially prohibits cryptocurrency transactions unless explicitly authorized by the NBE. Violators may face penalties, including imprisonment and fines. The NBE's primary concerns include financial instability, money laundering, the lack of consumer protection, and the potential for fraud associated with cryptocurrencies.

Despite this ban on using cryptocurrencies for transactions, there's a nuanced situation regarding other crypto-related activities. Notably, Ethiopia has shown an interest in and has been allowing cryptocurrency mining operations, primarily because these companies pay for electricity consumption in foreign currency. The Information Network Security Administration (INSA) issued Directive No. 002/2022 in August 2022, requiring individuals and entities involved in "crypto operations," including mining and transfer, to register with the authority. This created some ambiguity, as it seemed to contradict the NBE's outright ban on transactions. However, the NBE Governor has clarified that while crypto mining is permitted, the use of crypto assets for payments or transactions within Ethiopia remains strictly prohibited under the new law.

Recent reports from early to mid-2025 indicate that while the ban on crypto *transactions* remains firmly in place, Ethiopian authorities, including the Financial Intelligence Service (FIS) and the Ethiopian Capital Market Authority (ECMA), are making preparations to potentially regulate the sector in the future, particularly focusing on monitoring and addressing illegal virtual currency transactions and building capacity to identify violations of the current ban. There are discussions about developing a framework for digital assets, and the NBE is authorized to issue future guidelines. However, as of the current date, these preparations do not lift the existing ban on retail trading and transactions. The focus remains on controlling illicit activities and preparing for potential future regulation, rather than permitting current retail trading.

There are reports of a significant number of cryptocurrency users in Ethiopia, and trading reportedly continues through peer-to-peer platforms and offshore exchanges, despite the official ban. This indicates a gap between the legal stance and actual practice, with individuals engaging in these activities at their own risk.

Regarding KYC/AML requirements, while there isn't a specific framework for cryptocurrency exchanges (as they are not officially recognized or licensed), Ethiopia does have general AML/CFT (Anti-Money Laundering and Combating the Financing of Terrorism) laws, such as Proclamation No. 1176/2020. The INSA's registration requirement for "crypto operations" also hints at an attempt to bring some oversight. Furthermore, it's anticipated that any future regulatory framework for digital assets would include AML/KYC requirements for licensed operators.

In summary, the NBE's explicit prohibition on using cryptocurrencies for transactions makes retail trading illegal for individuals. While the government is exploring blockchain technology, allowing crypto mining under specific conditions, and preparing for potential future regulations, the current legal status for individuals buying, selling, and holding cryptocurrencies for transactional purposes is 'Banned'.

**3. Specific, Relevant Text Excerpts:**

*   **National Bank of Ethiopia (NBE) (June 2022, as reported by multiple sources):** "Birr is the only legal currency in Ethiopia, and all financial transactions shall be effected through it.'' The NBE also stated that "the use of Bitcoin and other digital currencies for transactions is illegal in Ethiopia, warning that violators will face strict action."
*   **National Bank of Ethiopia (NBE) (June 2022, via Fana Broadcasting Corporate):** “Ethiopia's national currency is the Ethiopian Birr, with any financial transaction in Ethiopia to be paid in Birrs, according to the law.” The NBE "urged citizens not to engage in “illegal” transactions in digital currencies" and stated that "digital currencies like crypto-currencies and bitcoins haven't been recognized by the NBE as a transactional and payment method."
*   **National Bank of Ethiopia Proclamation No. 1359/2024 (as per latest analysis):** "The use of cryptocurrency for payment transactions is explicitly prohibited."
*   **National Bank Governor Mr. Mamo Mehretu (as reported by Ethio Negari, December 2024):** "Mr. Mamo emphasized that while crypto mining is permitted, the use of crypto assets, such as Bitcoin, for payments or transactions is strictly prohibited under the new law. “The National Bank does not allow crypto assets to serve as money within Ethiopia,” he asserted."
*   **Information Network Security Administration (INSA) (August 2022, as reported by EMURGO Africa & Addis Standard):** INSA issued a directive requiring all cryptocurrency operators to register with them. “There is interest among individuals and entities in providing crypto services including mining and transfer,” INSA said, warning that crypto players who fail to register would be prosecuted. (Note: This registration for "crypto operations" does not supersede the NBE's ban on transactions).
*   **The Reporter Ethiopia (quoting Muluken Amare, Director of the Financial Intelligence Service, December 2025):** “Trading in virtual currencies other than the Ethiopian Birr is not allowed in Ethiopia, but we are offering training to prepare for the possibility of unauthorized trading.” He also stated, "Transactions are not legally permitted in Ethiopia."
*   **AInvest (December 2025):** "Ethiopia has been cautiously approaching cryptocurrency regulations, with a framework for digital assets expected to be fully developed by 2025. The National Bank of Ethiopia (NBE) oversees financial regulations, including crypto policies, to maintain financial stability and prevent illegal transactions. The country does not endorse cryptocurrencies for transactions but is developing a framework for digital assets."
*   **Coin Edition (quoting FIS Director Muluken Amare, December 2025):** “Trading in digital currencies other than the Ethiopian Birr is not allowed in Ethiopia,” Amare said. “But we are offering training to prepare for the possibility of unauthorized activities.”

**4. Direct, Accessible URL Links to Sources:**

*   National Bank of Ethiopia Warns of 'Illegal' Crypto Use: https://nbe.gov.et
*   INSA Call for Registration of Crypto Operations: https://insa.gov.et
*   National Bank of Ethiopia Proclamation No. 1359/2024: https://chilot.me/national-bank-of-ethiopia-proclamation-no-1359-2024/
*   Ethiopia Prepares to Regulate Crypto, Even as Official Ban Stays Put: https://www.lbank.com/news/ethiopia-prepares-to-regulate-crypto-even-as-official-ban-stays-put
*   Cryptomining in Ethiopia – Legal Outlook 2025: https://www.afriwise.com
*   Ethiopia Officially Bans Cryptocurrency Transactions - Ethio Negari: https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFG8qQ7wsxgBixmRQhKwhsK_kDJJck_uSPPIpZocaM84RiTN2kHlrppqgQnsZe9-zzGEXfKfnYfTU8_uAJWiQXE7y2NaduOnMintWh0Zro8QSp7xLrMYjIAtS_moFYYlaFe_08nB_KJ482tSW46iXMCsPh6diQJqN2xFvNX9h0nxHaYsJei01LhtZkkoKOvB7MZmmY=
*   National Bank of Ethiopia warns against transactions in digital currencies - FanaBC: https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFTem1yBg2GfzMltcKwJDuosQFQpZfnch3L8cMzukBfu74Z10hHE6DOX6HVohlVAjxfEfaTFItgeXN5HClPbvOrDs1LQz7_LpdTxAtBoFfYVH4evkIig-nabbO2Vslgb8jhNa7pDYJgSyK8GhMdBh6kGPl3oDtgXjB1Sce8r3KW2EFNRm0WXxXHNosAmQh1O6KLaMXLn9A-7Jq3gbVTm6Zul58JWvM=
*   Ethiopia Begins Preparations To Regulate Crypto Transactions - The Reporter Ethiopia: https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQHDHzJ1069-gcAAWSYcoOV-56RgLH7aGAWzZa2X-Q3kLfeptu6PzWD7NWMMbHtA8aac4Ebx_sum-mMfBuC535HWRhbkDZinhzlZ0ZBufXzLpxr5Rc7fcnZF73lK1CUNiFiHcQuiTQ==
*   Ethiopia to Finalize Crypto Framework by 2025, Bans Payments - AInvest: https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQENOvBPQd54rYk1CT_A_w8NubbJ8OC_JRREejrmiCopFusTXzYC8w7FRpNQ838BRG5TqERUaDkFCSm_DVT9etvCPTaaDUIEWzobZ1Dz9f50qox58mpaO26rHJsypl4bPyXqJWiWF100FVV6We6ljdiYp-a5_r9nrRh8wuOQ9MFEVQBp6wdoKvIoZUJ4f7fBspaVHhM=
*   Ethiopia Prepares to Regulate Cryptocurrencies Amid Rising Illegal Transactions - AInvest: https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQGJ9YSDAOgSQhf4ycJjK_nm8FfJOZzlS_xDEXpAQlOXcIHa6TL3lXMVlRvohVYGXqR9_YcKYhssWd3SkTEd-hioaWJ0O989wmYabVlmsXIjLYvOAak2Fe2fgPg6QPCMq8iS7P0U5jr6jA8uGJ5AnWq6MEBEHNBOKLHa5oIr2goz_WkJf5zkhTy_9_jE7-ftGptgT86Kdaoa9ky86XgKW6TqMB7iqE=