Ethiopian Central Bank: Business Transactions Using Bitcoin Are “Illegal”
- Ethiopia’s central bank issued a statement reminding its citizenry that business practices made with bitcoin are illegal.
- The National Bank of Ethiopia warned that “informal financial transactions” using BTC are used for “money laundering schemes.”
- The Commercial Bank of Ethiopia stated BTC was being used for commercial practices but it is unclear whether businesses are buying or selling with BTC.
The National Bank of Ethiopia (NBE), has reiterated that it is illegal to conduct business with cryptocurrencies such as bitcoin, according to a translated report from Ethiopian state media outlet Fana Broadcasting Corporate (FBC).
“Ethiopia’s national currency is the Ethiopian Birr, any financial transaction in Ethiopia is expected to be paid in Birrs, according to the law,” the NBE reportedly stated. The announcement quickly spread through local media because the central authority tried to make it clear that bitcoin use in business transactions was illegal. The monetary authority warned that those using cryptocurrencies like bitcoin are only using it for “informal financial transactions and money laundering schemes.”
The Commercial Bank of Ethiopia (CBE) released a statement that bitcoin was already being used by individuals for purchasing commercial products and services. However, the NBE is reportedly unclear whether or not businesses are transacting in bitcoin for their goods and services, and believes that transactions using bitcoin are becoming “increasingly prevalent,” yet did not release the category of users that are transacting. While the details of who is using Bitcoin in Ethiopia for what purposes are not clear, it is clear that the central banking authority is trying to stop this use.
In April, it was reported that Ethiopia was suffering 36% year-over-year (YoY) inflation rate. Inflation rates are high and have led to some countries adopting newer currencies, such as bitcoin. These currencies offer greater stability in the face of currency devaluation.