The National Bank of Ethiopia (NBE) last Friday issued a notice prohibiting peer-to-peer (P2P) cryptocurrency transactions involving the Ethiopian birr. The directive bars Ethiopians from swapping crypto for birr, or vice versa, on P2P platforms without regulatory approval.
The NBE says it is separately working to develop a regulatory framework that would govern the use of crypto in the country.
What this means
- If history is any guide, the ban is unlikely to keep traders off P2P platforms. Such crackdowns have historically pushed activity underground, making it harder — not easier — for regulators to monitor.
- This is not the first time the NBE has moved against crypto. The bank has issued similar bans at least twice before, a pattern that itself signals how little traction previous restrictions have gained.
- The NBE has defended its position on consumer protection, citing market volatility, risks of foreign exchange manipulation, fraud and gaps in AML/CFT safeguards.
- But the need to issue yet another ban suggests the policy is not working. Ethiopians have continued trading digital assets regardless.
- The notice also contains a notable omission. The prohibition is scoped specifically to birr-paired P2P transactions. Crypto-to-crypto trades are not addressed.
What comes next
- The NBE says it is consulting international regulators and local industry players to develop draft guidelines and formal regulations, citing a commitment to “alignment with global best practices.” No timeline has been given.
