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 circulated through local media as the central authority attempted to make it widely known that use of bitcoin was considered illegal in business transactions. 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 specifics of who is using bitcoin for what in Ethiopia is unclear, it is clear that it is being used and the central banking authority seeks to undermine that use.
In April, it was reported that Ethiopia was suffering 36% year-over-year (YoY) inflation rate. High inflation rates have largely contributed to some countries adopting newer forms of currency, such as bitcoin, that offer higher levels of stability amid the devaluation of their currencies.