National Bank of Ethiopia has instructed the public to stop using the Ethiopian Birr for peer-to-peer crypto trades, stating that such transactions are not allowed under the country’s current financial rules. The guidance covers direct trades between individuals on crypto platforms and informal online marketplaces where buyers and sellers exchange digital assets using local currency.
The regulator said Ethiopia does not yet have a legal framework for digital assets and warned that trading crypto against the Birr exposes users to risks that the financial system is not equipped to manage. These include sharp price swings, fraud, disputes between buyers and sellers, and the use of unofficial exchange rates that can distort the local currency market. Until proper rules are in place, any arrangement that links crypto trades directly to Birr payments is considered unauthorised.
In recent years, peer-to-peer crypto markets have grown across Africa as users look for ways to access digital assets despite limited formal exchange options. In Ethiopia, this activity has largely happened outside licensed channels, with users relying on messaging apps and online groups to find trading partners. Regulators say this makes it hard to protect consumers or trace funds when disputes or losses occur.
The central bank also raised concerns about how unregulated crypto activity can affect foreign exchange stability. When large volumes of Birr are used in informal crypto trades, it can create parallel pricing for the local currency and weaken oversight of money flows. This is one of the reasons the bank says it needs a clearer legal framework before allowing any form of crypto trading linked to the national currency.
Officials noted that work is ongoing to study how digital assets should be handled in Ethiopia. This includes reviewing approaches taken in other countries and assessing how to balance innovation with financial stability. For now, the regulator is urging the public to avoid Birr-paired crypto trades and to be cautious of platforms or individuals offering such services.
The situation reflects a wider trend among African regulators, many of whom are tightening oversight of informal crypto markets while drafting new rules for exchanges and service providers. Crypto activity tied directly to the Birr remains outside the law for the Ethiopians, until formal regulations are introduced.
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