Ethiopia Prohibits Use of Birr in Peer-to-Peer Cryptocurrency Trading
The National Bank of Ethiopia (NBE) has issued a public notice declaring that any peer-to-peer (P2P) cryptocurrency transactions denominated in the Ethiopian Birr are prohibited under the current regulatory framework.
This ban applies specifically to Birr-paired arrangements on trading platforms, exchanges, or similar services, which are not permitted unless explicitly authorized by the central bank. The notice emphasizes that all forms of Birr-denominated P2P trading or exchanges involving cryptocurrencies remain illegal until a formal regulatory structure is introduced.
The decision comes amid growing global interest in digital assets, but the NBE highlighted significant risks associated with unregulated activity, including high price volatility, potential foreign exchange manipulation, fraud, operational vulnerabilities, and the absence of proper safeguards like anti-money laundering protections. These unauthorized transactions operate outside Ethiopia's regulated financial system, lacking the consumer protections provided by formal institutions. The central bank urged the public to exercise caution and make informed decisions when dealing with virtual assets.
As part of its ongoing efforts, the NBE is developing a comprehensive regulatory framework for digital assets through consultations with international regulators and domestic stakeholders. This aims to align with global best practices while preserving financial stability and the integrity of the national payment system. Until the new rules are formally adopted, engaging in Birr-based P2P cryptocurrency transactions will continue to violate existing regulations, with the bank reaffirming its commitment to protecting consumers and maintaining a sound financial environment.
