The National Bank of Ethiopia (NBE) clarified in a recent statement that it is still “illegal” to transact using Bitcoin or other cryptocurrencies. Citizens are encouraged to continue trading using the Ethiopian Birr.
As reported by the state-affiliated Fana Broadcasting Corporate (FBC), Bitcoin and cryptocurrencies are yet to be recognized by the NBE as a legitimate means of payment.
“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 said in a statement.
The central bank’s concern lies in crypto’s alleged use for informal transactions and money laundering schemes in Ethiopia. It called on the public to report such “illegal transactions” if witnessing them.
Financial authorities across the world from the ECB to the Federal Reserve have shown concern over crypto’s use in financial crime, such as drug trafficking and sanctions evasion.
Blockchain intelligence firm Chainalysis finds that illicit funds transferred in crypto are increasing over time, but are rapidly declining as a share of total transactions.
Ethiopia’s crypto position stands in stark contrast to the Central African Republic (CAR), which adopted Bitcoin as legal tender in April. The nation is now planning on building various forms of infrastructure for embedding crypto into the economy.
However, the Bank of Central African States – which governs CAR’s legacy currency, the CFA – reportedly opposed the move, and was not consulted on the nation’s Bitcoin plan.
Hedge fund manager Paul Tudor Jones said last month that central banks will do what they can to stop Bitcoin’s adoption, given the threat it poses to their establishment.
“They lose the ability to control the creation and the supply of money,” he explained.