While the global adoption of digital assets continues, central banks in Africa remain concerned about the possible impact of cryptocurrency trading on local currencies.
Ethiopia is the latest government to issue a warning as it considers new regulatory measures.
The National Bank of Ethiopia (NBE) has warned against the increasing usage of the Birr in peer-to-peer (P2P) transactions on various trading platforms.
According to the institution, the use of Birr-paired P2P arrangements, such as trading platforms, exchanges, or similar products, is completely prohibited under the current regulatory framework unless specifically authorised.
Furthermore, any Birr-denominated trading or exchange of cryptocurrencies remains unlawful.
Late last year, the East African nation restricted access to major global crypto exchanges, including Binance, OKX, and Bybit.
Industry observers described the move as a “silent blockade” targeting P2P markets, coming just weeks after the NBE invested $150 million into the market to stabilise the Birr.
Acknowledging the increasing demand for digital assets, the bank noted that crypto markets are often characterised by extreme volatility and exposure to foreign exchange manipulation, fraud, and scams.
It also highlighted significant operational risks and the absence of key safeguards, such as anti-money laundering and combating the financing of terrorism protections, which are standard in regulated financial systems.
The NBE further noted that recent international events have shown that certain P2P platforms and exchanges face financial and technical challenges that can restrict users' access to their funds.
Consequently, the bank urged the public to carefully assess whether these assets align with their financial objectives and risk tolerance.
“The National Bank of Ethiopia is actively working toward a comprehensive regulatory framework that will enable safe and orderly participation in emerging digital asset technologies,” the bank stated.
“This process includes ongoing consultations with international peer regulators and domestic stakeholders to ensure alignment with global best practices while preserving financial stability and the integrity of the national payment system. Until such a framework is formally introduced, Birr-paired P2P cryptocurrency transactions remain prohibited.”
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