Ethiopian Central Bank Warns Crypto Not To Be Used As A Means Of Payment

Ethiopia's Central Bank insists crypto cannot be a tool of exchange. (Pixabay)

JAKARTA – The National Bank of Ethiopia (NBE) confirmed that transactions using cryptocurrencies are still illegal in Ethiopia. Therefore, the central bank asked its citizens to continue using the country's currency, the Ethiopian Birr. The NBE itself has not recognized cryptocurrencies as an official medium of exchange.

"Ethiopia's national currency is the Ethiopian Birr, with every financial transaction in Ethiopia to be paid in Birr, according to law," the NBE said.

The Ethiopian central bank is concerned about crypto being used for illegal transactions and money laundering in the country. The NBE urges the public to report illegal activities using cryptocurrencies.

CryptoPotato reports that financial authorities around the world from the ECB to the Federal Reserve have expressed concern over the use of cryptocurrencies in financial crimes, such as drug trafficking and sanctions evasion.

According to a report from Blockchain analytics firm Chainalysis, it found that illicit funds transferred in cryptocurrencies increased over time, but rapidly decreased as a share of total transactions.

The position of crypto in Ethiopia is in stark contrast to the Central African Republic (CAR), which adopted Bitcoin as legal tender in April. The country is now planning to build various forms of infrastructure to embed crypto in the country's economy.

However, the Bank of Central African States (CFA), which regulates CAR's reserve currency, is reportedly opposed to the move, and was not consulted on Bitcoin adoption plans.

According to billionaire Paul Tudor Jones, the central bank will do everything possible to stop the adoption of Bitcoin because it is considered a threat to today's financial system.

"They lose the ability to control the creation and supply of money," Jones said.

Despite the increasing adoption of crypto, it is not yet known whether any other country besides El Salvador and the Central African Republic will start to make Bitcoin the official medium of exchange of the country.